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Germany's DAX stock index hits record high

May 19, 2023

The German blue-chip DAX stock index has hit a record high amid growing market optimism. A Congress deal to lift the US debt ceiling and avert a confidence-wrecking default was credited with much of the upswing.

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A worker on the market floor in Frankfurt, with a graph behind showing a peak
After progress in the US dispute, the DAX index rose 0.8% on Friday to hit 16,292 pointsImage: Boris Roessler/dpa/picture alliance

The DAX stock market index — Germany's leading trading benchmark — hit a record high on Friday afternoon, eclipsing a previous peak set in November 2021.

The rally has been driven, at least in part, by guarded optimism after progress in a Washington dispute about raising the US debt limit.

How do the figures tally?

The DAX index rose 0.8% on Friday to reach 16,331 points by late afternoon but receded somewhat again before the close of trade. It had hovered below 16,000 points for much of the week, before breaking through that barrier on Thursday.

The last record high, of about 16,290 points, was reached before the economic fallout of Russia's invasion of Ukraine drove up inflation and interest rates, causing global stock prices to drop somewhat. 

Since a price slide to almost 12,000 in September, the DAX — which is now made up of Germany's top 40 leading blue-chip firms — has been faring better.

Despite a highly turbulent few years economically with COVID and then the war in Ukraine, the DAX has gained more than 50% in value since late in 2018, though some of this can be ascribed to its expansion from 30 companies to 40 in 2021.

The recent recovery of the German index, among others, has been bolstered in part by Beijing's decision in late 2022 to finally drop draconian COVID-19 restrictions in China.

As an important driver of global trade, China's economy hascontinued to falter, especially in industry. However, there are also positive signs.

European manufacturers of cars, luxury and sporting goods are confirming a healthy recovery.

Friday's spike, in particular, came amid high hopes in the United States that Congress would reach a deal to avoid a potentially disastrous default on the nation's debt.

US President Joe Biden, in Hiroshima for the G7 summit, has expressed confidence about striking a deal with Republicans to allow the US government to raise its credit limit and borrow more.

Germany wasn't alone in seeing stocks on the increase on Friday. By midday, France's CAC 40 benchmark added 0.8%, and Britain's FTSE 100 was up 0.4%.

Japan's Nikkei index 225 rose 0.8% to finish at 30,808.35 — the highest close for the index in about 33 years.

Wall Street also opened higher, heading towards its best week since March.

rc/msh (AFP, Reuters, AP)