The impending conclusion of the conflict sees Dax experiencing an all-time peak.
Recent developments in Ukraine's conflict have caused quite a stir in the stock market, boosting the Dax to a new all-time high. The German benchmark index, Dax, soared to 1.3% at the opening, reaching 22,429.92 points, and further climbing to 22,430 points.
Mid-sized companies' MDax also saw a rise, climbing by 1.06% to 27,475.90 points. The Eurozone benchmark index, EuroStoxx, also gained momentum, reaching 5,450.94 points, approaching its record high of around 5,522 points set in 2000.
The rally in stock prices is politically driven, as hopes for a swift peace agreement are on the rise. U.S. President Donald Trump and Russian President Vladimir Putin have announced plans to start talks between their negotiating teams to find a resolution to the Ukraine conflict.
However, this optimism has put pressure on defense companies, such as Hensoldt and Rheinmetall, which have seen their stock prices take a hit, losing 7% and over 3% respectively. On the flip side, individual stocks like Thyssenkrupp have seen a significant increase in share price, soaring by 10.5%. The industrial conglomerate's first-quarter operating result was impressive, and it received billion-dollar orders from its marine subsidiary.
Delivery Hero and Siemens shares also enjoyed a boost, climbing by 6% and nearly 5% respectively. Delivery Hero's success is attributed to strong numbers, while Siemens benefited from the sale of its drive subsidiary Innomotics in the last quarter.
The U.S. government's new approach towards Ukraine has had notable impacts on various sectors. For defense companies, the increased threat of regional peace instability has led to positive stock price movements. This trend is reminiscent of the Hamas-Israel conflict, where conflict intensity positively affected the daily stock market returns of U.S. defense companies. Investors believe that these conflicts enhance the business prospects of the U.S. defense industry due to anticipated increases in demand for arms[3].
In Ukraine, the surge in stocks listed on the Warsaw Stock Exchange (WSE) can be attributed to optimism for a peace plan. Ukrainian companies' stock prices have risen by nearly 25% in just a few days, reaching pre-war levels. This surge is in part due to the Trump administration's promise to present a plan to end the Russian-Ukrainian war soon, bolstering investor confidence in a quicker resolution to the conflict[2][5].
This optimism is also reflected in the rise of Ukrainian sovereign bonds and positive sentiment towards postwar reconstruction efforts and potential EU accession negotiations. The overall market reaction has been positive, with Ukrainian stocks and sovereign bonds showing notable gains[2][5].
Dax's latest all-time high was achieved due to the recent developments in Ukraine's conflict, with Dax investor Dax significantly benefiting from this boost. Despite defense companies like Hensoldt and Rheinmetall experiencing a dip, individual companies such as Thyssenkrupp have seen a significant increase in share price, with its marine subsidiary securing billion-dollar orders.
