Blue-chip power

Bear Market May Be Short-Lived

Frankfurt stock exchange bull bear stock chart Source picture alliance associated pr M 49269639
The bulls could return to the Frankfurt stock exchange. Sources: picture alliance / Associated PR [M]
  • Why it matters

    Why it matters

    Investors could benefit from a rebound of German stocks thanks to expected corporate earnings growth.

  • Facts

    Facts

    • The DAX index of leading German stocks has fallen more than 20 percent since April, which technically means it’s switched from a bull to a bear market.
    • Stocks have been battered by China’s market turmoil and the prospect of an imminent interest rate hike by the Federal Reserve.
    • Analysts expect share prices to rebound by the end of the year on the back of strong corporate earnings outlooks.
  • Audio

    Audio

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It’s official: after six-and-a-half years of steady gains, the DAX blue-chip index of 30 leading stocks has swung from a bull to a bear market. An upturn is said to be over when the stock market has fallen at least 20 percent, and that has now happened.

Since April, the DAX has lost as much as 22 percent, wiping some €250 billion, or $283 billion, off the market capitalization of Germany’s top companies.

Share prices brushed off Western economic sanctions against Russia and fears of a Greek bankruptcy, but weakening growth in China has brought the boom to an end, even though the companies generate more than three quarters of their revenues in Europe and America and only 16 percent in Asia.

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