Analysis: The Dax is rising to a record high - how can that be?
The automotive industry, once the country's most powerful sector, no longer plays a role in the markets. This is bad for the economy, but in the long term, it is even good for DAX investors.
On Monday, the DAX index soared past 26,000 points, reaching a record high. However, over the past few days, several DAX companies released disappointing first-half earnings reports. BMW's net profit fell by 26% compared to the previous year, VW's dropped by an even steeper 36%, while Mercedes' profit margin only slightly dipped by 4%.
The auto industry's impact was minimal though, as they no longer hold significant sway in the market. The automotive giants, including Mercedes, have seen their stock prices plummet over the past decade, making the overall DAX less concerned with further declines or occasional rises. Together, BMW, Mercedes, and VW are valued at 125 billion euros, down from nearly 300 billion euros during their peak in 2015.
The three automakers now represent 5.6% of the DAX, a significant drop from the 23% they held eleven years ago.
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
