DAX index was up 0.30% on Friday as the positive sentiment in the German equity markets persisted on the last trading day of the year. At press time, the benchmark of the German blue-chip stocks stood at 16,751 points.
This translated into a yearly gain of 20.30% for the DAX 30 index. This also makes it one of the best-performing indices in not just the EU but the whole world. The bullish market sentiment around the EU stocks is likely to persist as analysts expect the ECB to start cutting rates in 2024.
On the monthly timeframe, the index is up 3.3%. The overall bullish price action in Western equities can be attributed to the expectation of rate cuts next year. As inflation in EU regions is already on a downward trajectory, analysts expect the ECB to start lowering rates in the second half of next year.
According to the London Financial Times’ latest survey consisting of 48 analysts, the majority are optimistic about the rate cuts in H2 2024. In addition, 60% of analysts think that the ECB will achieve its 2% inflation target close to the end of next year. These expectations are fuelling the ongoing rally in German stocks.
On the basis of technical analysis, we can tell that there is some resistance around 16,780 points. Nevertheless, the DAX index forecast is still bullish as the index is well above the key level of 16,290 points. As long as it remains above this level, every dip could be an opportunity to buy.
This post was last modified on Dec 29, 2023, 16:30 GMT 16:30