Germany’s DAX index passes 23,000 points, extending record rally

Germany’s leading stock market index, the DAX, climbed above 23,000 points for the first time on Monday.

The Frankfurt-based index rose by 2.69% to a record high of 23,158.47 on Monday afternoon, just over a week since the conservative CDU/CSU bloc won national elections.

The DAX’s record run – amounting to a 16% gain so far in 2025 – comes despite two consecutive years of recession in Germany, with the index passing the landmark of 20,000 points in December.

Monday’s rally was spurred on by a jump in defence stocks.

Shares in German arms giant Rheinmetall have soared since the Russian invasion of Ukraine and climbed again in recent weeks, amid reports that the next government in Berlin could seek to call a special parliamentary session to boost defence spending.

Car stocks were also up after European Commission President Ursula von der Leyen proposed granting manufacturers more time to comply with stricter climate targets.

Shares in Europe have performed significantly better than in the United States in 2025, thanks to strong company figures and low valuations compared to US shares.

Another factor is the European Central Bank’s expected decision to cut interest rates again this week, after inflation in the eurozone slowed to 2.4% in February.

The domestic situation in Germany may also have left investors confident, with conservative leader Friedrich Merz’s CDU/CSU alliance – made up of the Christian Democrats and the Bavaria-only Christian Social Union – set to take power in Berlin.

The DAX measures the performance of 40 leading German companies on the Frankfurt Stock Exchange.