The German leading index DAX shows itself to be overall stable and prudent in June 2025, despite global economic and geopolitical uncertainties.
Current Market Development of the DAX
- At the beginning of June, there were adjustments in the DAX blue-chip indices, effective June 23, which caused some market movement.
- In mid-June, the DAX reacted with opening losses to escalating geopolitical tensions, particularly due to the military conflict between Israel and Iran. This uncertainty led to a cautious stance among investors, especially in sectors indirectly dependent on the Middle East, such as the automotive, machinery, and chemical sectors.
- Despite these turbulence, the DAX has proven resilient by the end of June. Brokers report a “resilient rally” supported by a calming of the geopolitical situation (e.g., ceasefire between Israel and Iran) as well as a dovish monetary policy from the U.S. Federal Reserve.
Reasons for the Stable Performance
- The ceasefire in the Middle East conflict has reduced fears regarding energy supply chains and global trade, benefiting German exporters.
- Falling oil prices (below $70 per barrel) alleviate logistics and production costs especially in export-oriented sectors like the automotive industry.
- Major German car manufacturers such as BMW and Daimler benefit from rising demand in previously conflict-averse markets in the Middle East; their stocks also offer attractive dividend yields over 4% at current price discounts.
Conclusion
Despite short-term volatility due to geopolitical tensions, the DAX appears robust in the overall picture with a stable performance. Investors are currently focusing significantly on these market developments and sectoral opportunities – especially in the automotive sector – to manage risks and capitalize on return opportunities. However, Germany’s export dependence remains a factor that could lead to fluctuations amid ongoing global uncertainty.