Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
Germany’s Dax index climbed to a file excessive on Friday as investor optimism over US commerce offers boosted world markets, changing into the primary main European benchmark to recoup the losses sparked by Donald Trump’s tariff threats.
The index was 0.7 per cent increased in morning buying and selling, after Thursday’s announcement of a US-UK commerce deal on Thursday was adopted by a name between Trump and Germany’s new chancellor, Friedrich Merz, wherein they agreed on the necessity to shortly resolve commerce disputes.
The Dax’s return to all-time highs additionally displays the wave of enthusiasm for German stocks sparked earlier within the 12 months by Merz’s plans to extend borrowing and inject lots of of billions into the nation’s navy and infrastructure.
Emmanuel Cau, head of European fairness technique at Barclays, stated the commerce information had given a broad enhance to inventory markets. Nevertheless, he added that “there may be an additional diploma of pleasure in Germany as a part of this revival narrative and the arrival of the brand new authorities”, he stated. “There’s increasingly curiosity in Germany.”
European shares have outshone their Wall Road friends this 12 months as a result of optimism over defence spending mixed with rising fears over the impression on the US financial system from Trump’s commerce warfare.
The Dax is up almost 18 per cent 12 months so far. Though US shares have additionally recovered their losses since Trump’s “liberation day” tariff bulletins in early April, the S&P 500 benchmark stays nicely beneath its February all-time excessive and is down almost 4 per cent to date in 2025.
This has partially narrowed a gaping valuation hole between US and European equities that has widened lately as a result of a relentless rally in US tech shares.
