The German stock market rose significantly on Thursday after the next major interest rate move by the European Central Bank (ECB). At first, the increase made investors nervous and caused the Dax to turn negative.
However, the hope of a less rigid monetary policy in the future ultimately drove the leading index 1.57 percent higher to 14,967.10 points, with which it was able to make up for at least part of the significant losses of the previous day. The MDax for medium-sized companies went up 0.94 percent to 27,043.77 points.
The ECB had raised the key interest rate again by 0.5 percentage points – despite the uncertainty in the banking sector after the collapse of several smaller US banks and concerns about the major Swiss bank Credit Suisse. “That expresses justifiable confidence in the solidity of the European banking system,” commented Ulrich Kater, chief economist at Dekabank. The ECB did not allow itself to be dissuaded from its announced interest rate.
However, analyst Ulrich Wortberg from the Landesbank Hessen-Thüringen pointed out that the ECB had not committed itself to further interest rate hikes in its accompanying statement: “All in all, it seems that the monetary watchdogs could exercise restraint and reduce the rate of interest .” After the ECB, the US Federal Reserve will next decide on interest rates on March 22nd.
The banks were once again the focus of the market. A multi-billion dollar aid package from the Swiss central bank for the ailing Credit Suisse supported the entire sector. In addition, the ECB stressed that the capital and liquidity positions of euro area banks were sound. In Germany, Commerzbank reduced its recovery gains after the ECB interest rate decision to an increase of 0.3 percent, Deutsche Bank even fell 1.3 percent.
Away from the banks, Siemens Energy defied the fundamentally negative effect of a capital increase worth billions to finance the complete takeover of the wind power subsidiary Siemens Gamesa with a plus of 5.1 percent and took the lead in the Dax. According to stockbrokers, the market was already well prepared for the move.
At Grand City Properties, on the other hand, not paying a dividend didn’t sit well with investors. The shares, bringing up the rear in the SDax small-cap index, slipped 6.8 percent to a low since February 2014. The shares of parent company Aroundtown in the MDax fell even more significantly by 10.2 percent in this wake. At the end of the Dax, Vonovia fell by 4.4 percent. Europe’s largest landlord cut the dividend in the evening after the stock exchange closed and presented figures. TAG Immobilien also lost 4.5 percent after a cautious outlook.
The EuroStoxx 50, the leading index in the euro zone, closed 2.03 percent higher at 4116.98 points. France’s Cac 40 was also up a good 2 percent, while Britain’s FTSE 100 was up around 0.9 percent. In New York, the Dow Jones Industrial turned positive after a weak start and gained almost 1 percent at the end of European trading. The technology-heavy Nasdaq 100 index was even up more than 2 percent.
The euro regained some ground after its recent slide and was last traded at $1.0622. The ECB set the reference rate at 1.0595 (Wednesday: 1.0549) dollars. The dollar thus cost 0.9438 (0.9480) euros.
On the bond market, the current yield fell from 2.34 percent on the previous day to 2.29 percent. The Rex pension index fell by 0.33 percent to 125.41 points. The Bund future lost 0.50 percent to 136.28 points.
