German stock markets bull: DAX hits record 10,000
Following the announcement of further ECB liquidity measures, the German stock market index DAX has briefly surpassed the 10,000 mark for the first time in history.
Despite the rally, German stocks remain slightly undervalued. According to Bloomberg, German stocks are on average 20% cheaper than at their peak in 2009.
At the same time, profits at many of the listed blue chip companies of the DAX, including energy giants RWE and EON, as well as financial institutions such as Deutsche Bank have been disappointing.
Draghi justified the latest measures with the ECB’s adjusted predictions of GDP growth. The projection for real GDP growth for 2014 has been revised downwards 1.0% , while the projection for GDP growth in 2015 has been revised upwards to 1.7%.