Germany’s DAX benchmark index is ready to exit the bear market which began last month, after rising 20% from last month’s low triggered by worries about the coronavirus pandemic.
The export-heavy index, which fell as much as 40% in a sell-off that began late February, has recovered in recent weeks by indications that infection rates in some parts of Europe may be nearing a peak and on positive signals from China, where the latest PMI figures show recovery V. DAX economies are up 3.4% at 9:35 in Frankfurt.
“The current surge in the equity market is banking on a rather optimistic scenario for the Covid 19 infection curve and the rapid rise of global economic activity. Therefore it makes sense to look at DAX measures to do better, “Frederik Hildner, portfolio manager at Salm-Salm & Partner, said by telephone. “However, not retesting lows without major medical advances will only surprise me,” he said.
Read more: Chinese Bounce Helps European Stocks. Up to the Point: Take Inventory
The DAX rebound from the March 18 closing low has been led by Fresenius SE & Co. KGaA, Infineon Technologies AG and Allianz SE, respectively rose 43%, 40%, and 39% in the period.
With the recent increase, the German index has cut the 2020 decline to 21%, in line with the Stoxx Europe 600 Index.
“The economic impact has not been seen and could once again thwart the recent price recovery,” Andreas Lipkow said, noting that the recent increase was more technical than fundamental.
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