Strengthening DAX Over Weekend - Uptrend in Arms and Banking Sectors Persists
The DAX index, a key indicator of Germany's stock market performance, showed a 1.42 percent gain on Monday, reaching 23,757.69 points, despite recent uncertainty driven by U.S. political developments.
Analysts predict a generally positive outlook for the DAX through 2025, with the index gradually climbing towards and above the 23,000–24,000 level by late 2025. By the end of 2025, forecasts suggest a rise to about 25,000, and further gains towards 30,000 by 2027.
In August 2025, the DAX is expected to fluctuate between a minimum of approximately 22,000 and a maximum in the 25,000–26,000 range, with an average near 23,500–24,000. The optimism is driven by easing fears over U.S. tariffs impacting European corporate earnings and hopes for improved U.S.-EU trade relations.
Sector-specific news is influencing investor sentiment. For instance, semiconductor stocks like Infineon Technologies showed strength with raised profit outlooks, while automotive stocks (Volkswagen, Porsche, BMW, Mercedes-Benz) gained following strong German car registration data. On the other hand, banking stocks such as Deutsche Bank and Commerzbank have faced challenges amid concerns about lower interest rates affecting earnings.
The DAX has also benefited from Federal Reserve rate cut optimism and expectations of multiple Fed rate reductions, which are lifting the overall market outlook despite broader concerns of a U.S. recession.
However, short-term fluctuations remain due to geopolitical and sector news. For instance, the recent dismissal of the head of the U.S. Bureau of Labor Statistics has added to the uncertainty. In the week leading up to this report, the DAX lost around 2.7 percent at the close.
Notable performers in the DAX include Heidelberg Druck, which announced its entry into the defense business through a strategic partnership and saw a 7.6 percent gain. Barclays analyst Andrew Lobbenberg raised his rating for Lufthansa to "Equal Weight". Commerzbank saw the biggest gain with a 5 percent increase, receiving impetus from the defense sector.
On the flip side, Stabilus, an auto and industrial supplier, was the worst performer in the SDAX with an 11.4 percent drop in shares. Lufthansa shares reacted with a 1 percent increase in price.
Jürgen Molnar, capital markets strategist at Robomarkets, believes the DAX has shifted from a consolidation to a correction mode. European bank stocks received a boost from the recent stress test by the European Banking Authority.
For more granular day-to-day projections or sector-specific analyses, forecasts are updated regularly on financial platforms.
The optimistic outlook for the DAX throughout 2025, driven by various factors such as easing trade relations and Federal Reserve rate cut optimism, also includes promising prospects in the banking-and-insurance sector. For instance, Commerzbank, a notable performer in the DAX, experienced a 5 percent increase, receiving impetus from the defense sector in the finance industry.
However, it's essential to note that, despite the overall positive forecast, industries like banking-and-insurance, particularly banks like Deutsche Bank, still face challenges amid concerns about lower interest rates affecting earnings.
