Germany’s leading stock market index, the DAX, reached a new record high on Thursday, breaking through the 27,000-point mark for the first time. The index briefly climbed to 27,001.67 points. In the early afternoon, it was still trading comfortably above 26,800 points. The benchmark index has been rising for several days, driven by positive corporate earnings and currently falling oil prices.
Siemens, for example, reported strong figures on Thursday morning. The industrial group is benefiting significantly from the global expansion of data centres. US technology giants such as Microsoft and Meta are spending hundreds of billions of dollars on additional computing capacity in the race to develop artificial intelligence. Companies such as Siemens supply the electronics and cooling systems and operate the facilities.
On Tuesday, semiconductor manufacturer Infineon also reported a record quarter. The company, based in Neubiberg in the district of Munich, produces semiconductor technology used to control power supplies in data centres.
However, the biggest gain on Thursday was recorded by online retailer Zalando, whose shares rose by more than four per cent. Medical technology company Fresenius and construction group Hochtief also posted significant gains. Overall, the DAX rose by almost one per cent. Other European markets were also slightly higher, with Paris gaining 0.5 per cent and London 0.2 per cent.
"The starting conditions could hardly be more favourable," said Andreas Lipkow, an analyst at CMC Markets. "Falling energy prices, convincing quarterly results and hopes of a sustained economic recovery are providing an increasingly solid foundation for the continuation of the year-end rally."
The German benchmark index had already begun its upward surge following last week's US midterm elections, reaching a new record high. The rally was supported by hopes of military de-escalation in the Iran war after US President Donald Trump's Republicans suffered a crushing defeat in the elections.
Although US technology companies and Asian memory chip manufacturers have suffered significant share price losses in some cases, the situation surrounding chip developer Nvidia is creating further uncertainty.
Amid an affair involving company CEO Jensen Huang and an alleged Chinese spy, as well as reports of another affair with an Nvidia employee, the possibility of the company's founder being removed from his position is being discussed. However, European markets are less exposed to shares of major technology companies.
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