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DAX headed for new highs

January 2, 2013

Germany's top-30 stock index, the DAX, has been bullish after markets opened on the first trading day of the new year. The early-morning rally has been a response to the fiscal deal reached in the US at the 11th hour.

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The curve of the DAX board is seen at the Frankfurt stock exchange REUTERS/Remote/Michael Leckel
Image: Reuters

German stocks rallied in early trading on Wednesday in response to a last-ditch US deal to prevent across-the-board tax hikes and spending cuts.

The blue-chip DAX-30 index rose by close on two percent after markets opened, easily clearing the 7,700-point-mark and heading towards 7,800 points - its highest level since January 2008.

All stocks in the index were seen in positive territory with the sole exception of Fresenius Medical Care, while shares from Volkswagen, ThyssenKrupp, Commerzbank and Deutsche Bank experienced the biggest boost on Wednesday morning. The euro traded at well over 1.32 US dollars.

Beacon of hope

Asian stocks also took off as the US fiscal crisis came to a preliminary end. Markets on the continent cheered the developments in Washington as a major risk for investors appeared to have receded for now.

"This is great news for global growth and explains why shares and other growth-related assets are strongly up today," said AMP Capital strategist Shane Oliver.

The Hang Seng index in Hong Kong (HSI) for instance rose by 1.9 percent to 23,090 points, marking its best performance in 19 months.

hg/rc (dapd, Reuters)