German stocks were sharply higher on Tuesday, with improved business confidence data and news of a billion-dollar takeover deal combining two of Germany’s biggest property developers boosting sentiment.
The benchmark DAX jumped 127 points, or 0.8 percent, to hover near a record high at 15,564 as traders returned to their desks after a long holiday weekend.
Vonovia SE slumped 4 percent while Deutsche Wohnen SE soared as much as 15 percent after they signed an agreement to combine the two companies.
Vonovia said it will launch a voluntary public takeover offer for all outstanding shares in Deutsche Wohnen.
Technology stocks followed their U.S. peers higher, with Infineon Technologies gaining 2.7 percent.
A measure of German business sentiment improved markedly in May to reach its highest value in two years, the Ifo Institute said earlier today.
The Ifo business-climate index came in at 99.2 points in May compared with a revised reading of 96.6 points in April, reflecting increased optimism about the economic outlook.
Meanwhile, the German economy contracted slightly more than initially estimated in the first quarter due to the coronavirus pandemic, revised data from Destatis revealed.
Gross domestic product fell 1.8 percent sequentially in the first quarter, in contrast to the 0.5 percent expansion seen in the fourth quarter. The sequential fall was revised from -1.7 percent.
On an unadjusted basis, the annual decline in GDP deepened to 3.4 percent from 2.3 percent in the fourth quarter. The rate was revised from 3.3 percent.
The calendar-adjusted GDP was down 3.1 percent on year, following a 3.3 percent decline a quarter ago. According to flash estimate, GDP was down 3 percent.
Market Analysis
DAX Climbs On Takeover News
2021-05-25 09:03:05
