DAX could break more records this year

DWS_logoGermany, the post-financial crisis economic powerhouse of Europe, could see record highs in its DAX stock market this year, said Henning Gebhardt, head of European equities at DWS Investments, Deutsche Bank's fund house.

DWS forecasts a growth of 3% year over year for the German economy – although Gebhardt estimates a conservative end for the year-end close of the DAX at between 7600 to 7800 points.

“The mid-term outlook remains nevertheless positive and ideally new all-time highs for the DAX could already be within reach this year,” he said.

Gebhardt said there is a “high likelihood” Germany will again show the highest growth within the euro zone as it did in 2010, said

“While strong exports contributed mostly to the growth in 2010, the recovery is now broadening further. In addition to a strong export business, the domestic demand both from German companies as well as private households has increased,” said Gebhardt.

The reasons for this include the low unemployment rate, which is at an 18-year low, and the increased output capacity in many industries. “Thus the recovery has become more sustainable,” he added.

But ongoing uncertainty about a solution for the European sovereign debt crisis, stronger increased raw material prices as well as a possible headwind by a stronger euro are currently weighing on the stock market and could result in an higher volatility, especially during the summer months.

©2011 funds europe