Why German stocks just hit a record high

Germany's main stock index reached a record high on Monday, buoyed by a pandemic recovery package agreed in the US and Britain's Brexit deal with the EU.

Why German stocks just hit a record high
The DAX index in Frankfurt on Monday as it jumped to a record high. Photo: DPA

Having been closed since December 23rd, the blue-chip DAX index bounced 1.7 percent, reaching 13,819 points at the open, topping the previous high set in February before the coronavirus pandemic forced Europe into lockdown.

The index has now pared some of its gains to 13,791 points, a rise of 1.5 percent.

The jump came after US President Donald Trump signed a $900 billion (€735 billion) stimulus bill late Sunday, averting a government shutdown and removing considerable uncertainty for the world's largest economy.

The US leader had previously refused to sign the relief package, arguing that it included wasteful spending.

On December 24th, Britain and the European Union agreed a post-Brexit dealthat ended the potentially destructive possibility of its disorderly exit from the bloc.

The Brexit deal and the US aid package were pushing the DAX to “a new high”, Jochen Stanzl, an analyst at CMC Markets, said.

The market is “breathing a sigh of relief” after the Brexit deal, independent analyst Timo Emden added.

Germany began rolling out its first Covid-19 vaccinations on Sunday, but some delays were reported and production capacity remains limited.

READ ALSO: First doses of Pfizer's Covid-19 vaccine arrive in German regions

“For the markets, it remains crucial to get Covid-19 under control as soon as possible,” Emden said.

The DAX's previous high was 13,795 points in February, but it plunged to 8,255 points in March as the pandemic shutdowns battered Europe's economy.

Markets recovered as restrictions on the economy were lifted in the summer and after central banks pumped billions in monetary stimulus into the economy, including €1.85 trillion ($2.3 trillion) by the European Central Bank.

Member comments

  1. Well that’s just great for the bankers, politicians & their scumbag mates,but this does nothing for the blue-collar workers. Wall Street is no real reflection of main street.

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Germany should prepare for Covid wave in autumn, ministers warn

German health ministers say that tougher Covid restrictions should come back into force if a serious wave emerges in autumn.

Germany should prepare for Covid wave in autumn, ministers warn

Following a video meeting on Monday, the health ministers of Germany’s 16 states said tougher restrictions should be imposed again if they are needed. 

“The corona pandemic is not over yet – we must not be deceived by the current declining incidences,” said Saxony-Anhalt’s health minister Petra Grimm-Benne, of the Social Democrats, who currently chairs the Conference of Health Ministers (GMK).

According to the GMK, new virus variants are expected to appear in autumn and winter. Over the weekend, federal Health Minister Karl Lauterbach (SPD) also warned that the more dangerous Delta variant could return to Germany. “That is why the federal Ministry of Health should draw up a master plan to combat the corona pandemic as soon as possible and coordinate it with the states,” Grimm-Benne said.

Preparations should also include an amendment of the Infection Protection Act, ministers urged. They want to see the states given powers to react to the infection situation in autumn and winter. They called on the government to initiate the legislative process in a timely manner, and get the states actively involved.

The current Infection Protection Act expires on September 23rd this year. Germany has loosened much of its Covid restrictions in the last months, however, face masks are still compulsory on public transport as well as on planes. 

READ ALSO: Do people in Germany still have to wear Covid masks on planes?

The health ministers said that from autumn onwards, it should be possible for states to make masks compulsory indoors if the regional infection situation calls for it. Previously, wearing a Covid mask was obligatory in Germany when shopping and in restaurants and bars when not sitting at a table. 

Furthermore, the so-called 3G rule for accessing some venues and facilities – where people have to present proof of vaccination, recovery, or a negative test – should be implemented again if needed, as well as other infection protection rules, the ministers said. 

Bavaria’s health minister Klaus Holetschek, of the CSU, welcomed the ministers’ unanimous call for a revision of the Infection Protection Act. “The states must be able to take all necessary infection protection measures quickly, effectively, and with legal certainty,” he said.

North Rhine-Westphalia’s health minister Karl-Josef Laumann (CDU) warned that no one should “lull themselves into a false sense of security”.

“We must now prepare for the colder season and use the time to be able to answer important questions about the immunity of the population or the mechanisms of infection chains,” he said.

On Tuesday, Germany reported 86,253 Covid infections within the latest 24 hour period, as well as 215 Covid-related deaths. The 7-day incidence stood at 437.6 infections per 100,000 people. However, experts believe there could be twice as many infections because lots of cases go unreported. 

READ ALSO: Five things to know about the Covid pandemic in Germany right now