In brief

• The DAX briefly exceeded 26,600 points and broke the record from the end of August.
• The Democrats' victory in the U.S. midterm elections supported market sentiment.
• Falling oil prices and good corporate results further lifted the index.

New peak for the German stock exchange

The main German index, the DAX, briefly reached 26,626 points before noon, which means it broke the previous record from the end of August, when it hit 26,618.74 points (Niemiecka giełda bije kolejny rekord. Pomogły wybory w USA – Business Insider Polska). On that day the DAX also crossed the 26,500-point level (Wirtschaft - Dax steigt auf Rekordhoch – Deutschlandfunk).

U.S. elections and oil

The strongest impulse came from the Democrats' victory in the U.S. midterm elections. The party won majorities in both the House of Representatives and the Senate. According to analysts, this limits the possibilities of President Donald Trump, though it does not strip him of power (Dax springt auf Rekordhoch – DER SPIEGEL). Jochen Stanzl of Consorsbank assessed that markets value a clear result and the fact that a divided government reduces the risk of political surprises.

Falling oil prices also supported the gains. Investors are counting on a partial easing of the situation in the Middle East, and cheaper oil may cool inflation. Positive corporate results also added to the rise.

Industry and context

The improvement in sentiment was further supported by an increase in orders in German industry in September. DAX companies generate most of their revenues and profits abroad, so they depend less on the domestic economy than small firms do.

Analysts at the broker IG note that maintaining the pace of gains could allow the record to be tested in the coming days, provided buyers keep the index above 26,000 points (Marktbericht: DAX nähert sich dem Rekordhoch – tagesschau.de). They warn, however, that geopolitical tensions and the risk of sharper declines remain current.