All DAX Index Constituents Are in the Red YTD Except These 4

Summary:
• These are the only four DAX index constituents that have risen this year. We explain why firms like Bayer and MTU Aero have risen.

The DAX index staged a strong recovery rally on Wednesday as investors anticipated a new round of stimulus from EU leaders and the European Central Bank (ECB). The index soared to a high of €13,847, which was the highest point it has been since March 2. It was also about 11% above the lowest level this year. 

A closer look at the index shows that most of its constituents have crashed by double-digits this year. Only four companies in the DAX 40 index have risen. Delivery Hero and Hello Fresh are the worst performers, having crashed by more than 50% this year. The two food delivery companies have dropped by over 50% in the past 12 months. The other worst performers are Sartorius, Puma, Zalando, and Continental. 

The four DAX index constituents in the green are Bayer, MTU Aero, RWE, and Fresenius. The Bayer share price has risen by over 15% this year although it has crashed by about 4% from the YTD high. The current stock price is about 22% above the year-to-date low. Analysts believe that Bayer will continue doing well regardless of the sanctions.

MTU Aero is a leading German industrial company that manufactures several products for military and commercial airlines. It is also in the power industry, where it engineers gas turbine products. The MTU Aero share price has risen by 11.65% because of the strength of its military and gas businesses. Germany agreed to supply weapons to Ukraine, which is expected to benefit the firm.

RWE, a leading power company in Germany has been volatile as the price of natural gas has remained at elevated levels. The stock initially jumped to a high of 42 euros but it has retreated to the current 37p. It remains about 11% above the lowest level this year.

The final DAX index company that has risen slightly this year is Fresenius, which is a large company that offers kidney dialysis services in the country and abroad. It has over 345k patients every year and generates more than 18 billion euros in revenue every year.

DAX index forecast

The daily chart shows that the DAX moved into a bear territory this week as its stock dropped to the lowest level since 2020. It then staged a major comeback on Wednesday as stimulus hopes rose. However, this jump may be a dead cat bounce, which happens when a falling stock makes a strong move. Therefore, there is a likelihood that the index will remain under pressure in the near term.