Markets

Germany’s DAX surpasses 12,000 for first time

Benchmark index rises for a sixth week to advance to highest level since July 2007

Traders work at their screens in front of the German share price index DAX board at the stock exchange in Frankfurt March 16th, 2015. European stocks rose on Monday, shrugging off losses on Wall Street and extending their recent sharp rally, as investors bet that a renewed drop in the euro would boost the region’s economy and lift exporter earnings. (Photograph: Reuters)

Mon Mar 16 2015 - 10:01

European stocks extended their gains as Germany’s DAX Index surpassed 12,000 for the first time. The Stoxx Europe 600 Index advanced 0.6 per cent to 399.04 at 9:21 a.m. in London, with automakers leading the rally.

The DAX advanced 1 per cent to 12,017.43. The European benchmark index rose for a sixth week as the European Central Bank started buying sovereign debt. It closed at its highest level since July 2007, pushing its valuation to 16.7 times estimated earnings, the highest in at least a decade. "The market drivers are still liquidity, central bankers, and people searching for any kind of yield they can get," said Michael Woischneck, who helps manage about $6.5 billion at Lampe Asset Management in Dusseldorf, Germany. "Some stocks are obviously overvalued, such as the more obvious cyclical plays, but the market is not yet too expensive in Europe."

The DAX has rallied 23 per cent this year, with Commerzbank AG and K+S AG leading the gains on Monday. Italy’s FTSE MIB Index rallied 1.2 per cent for the biggest advance among 18 western-European markets.

The Swiss Market Index increased 0.3 per cent, taking its gain since a January low to 16 percent. It closed 0.5 per cent away from its level before the Swiss National Bank abolished the franc cap. SNB officials are preparing their first economic forecasts to assess the impact of that move, and President Thomas Jordan will give their outlook on March 19.

READ MORE

Stoxx 600 carmakers climbed 1.3 per cent as a group, with Fiat Chrysler Automobiles NV rising 3.9 per cent. BMW AG, Daimler AG and Continental AG gained more than 1.2 percent. HandM, DSM Hennes and Mauritz AB added 2.3 percent after reporting that first-quarter sales rose more than analysts had projected. Royal DSM NV climbed 2.3 per cent after the Dutch chemical maker agreed to sell a majority stake in a plastics and resins business.

Lafarge SA slipped 4.4 per cent and Holcim dropped 1.7 per cent. The French cement maker said it's willing to consider revising the share-exchange ratio in its planned merger with the Swiss company. Holcim wrote in a letter to Lafarge last week, saying that it doesn't intend to pursue the transaction under the terms agreed last July.

Standard Life Plc slumped 16 per cent before the UK government announces its budget this week.

Bloomberg

LATEST STORIES