Amid continued concerns about potential trade tariffs, German stocks are experiencing a robust rally on Wednesday morning. This surge can be attributed to positive earnings reports from Adidas and U.S. President Donald Trump's announcement regarding substantial investment in AI infrastructure in the United States.
Market sentiment is further buoyed by anticipation of an interest rate reduction by the European Central Bank in the coming week. During an interview with Bloomberg TV's Francine Lacqua in Davos, Switzerland, ECB policymaker Klaas Knot expressed support for imminent rate cuts.
Knot indicated that bets among investors on rate cuts in both January and March are justifiable, though he cautioned that any longer-term projections are challenging due to significant global uncertainty.
Currently, the benchmark DAX index has gained 225.55 points, marking a 1.08% increase, to reach 21,267.07. This figure is slightly below a newly reached record high of 21,273.93 from earlier in the session.
Adidas has shown impressive performance, with its shares rising nearly 6.5% following a 24% increase in revenues to €5,965 million in the fourth quarter of 2024. This compares favorably to the previous year's €4,812 million. The company also reported an operating profit of €57 million, a significant turnaround from the €377 million operating loss recorded in the same period last year.
Siemens Energy, which witnessed a sharp decline in the previous session due to rating downgrades, is rebounding with a gain of 6.8%. Munich RE is up by 3.2%, while Hannover Rueck, Rheinmetall, SAP, Siemens, Sartorius, Daimler Truck Holding, BMW, Puma, and Siemens Healthineers have increased between 1% and 2.3%.
Conversely, Porsche AG shares have decreased by 2.3%. Deutsche Telekom, Commerzbank, Infineon, Deutsche Post, Bayer, and RWE are experiencing declines ranging from 0.3% to 1%.
