Solid ifo figures as overheating fear mounts

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Strong ifo figures provided a small boost to struggling stock markets this morning, with the monthly business climate index indreasing to 108.6bsp compared to 107.9 bsp the previous month.

The ifo manufacturing index rose for the sixth month in a row, while the ifo wholesale index reached its highest level in a year and even data for the construction industry looked upbeat.

Yet while German stock market index Dax has reached 27 record levels in 2015 alone, concerns are now mounting that German stocks may have become overvalued.

Neil Richardson, investment director at Standard Life Investments warns that the economic stimulus of QE was unnecessary for the German economy and could end up being counterproductive.

As a result of recent stock market rallies, the Dax has increased by 26% this year while stocks of key blue chip businesses such as Volkswagen and and BMW have slumped by 9.%  and 6.1% respectively.

ABOUT THE AUTHOR
Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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