Solid ifo figures as overheating fear mounts
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.