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(Bloomberg) -- Germany’s main equity benchmark concluded its biggest two-year run in more than a decade, leaving the country’s European rivals trailing in the dust.
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On Monday, the DAX Index closed the year 19% higher to extend a rally since January 2023 to 43%. While the export-heavy gauge has lagged the S&P 500 in the US for 2024, it far outpaced regional peers including the UK’s FTSE 100 and France’s CAC 40.
German markets will be closed on New Year’s Eve and Jan. 1 with trading set to continue on Thursday.
Expectations for a healthy global economy and a recovery in China have supported German stocks at a time when the local economy is facing challenges. SAP SE was the biggest contributor to 2024’s continued gains as investors sought technology plays, accounting for nearly a third of the index’s rally.
A surge in excess of 300% for Siemens Energy AG added to the outperformance, while an increase in defense spending helped fuel Rheinmetall AG shares to more than double in value.
These strong performances helped to offset struggles in some of Germany’s core sectors.
Automotive stocks were hurt by lagging demand and the growing strength of Chinese electric-vehicle manufacturers, with the likes of Volkswagen AG, Porsche AG and BMW AG all suffering losses of 20% or more. Bayer AG was the biggest loser with a 43% decline as the chemical maker’s struggled with its turnaround plan and legal battles.
Strategists are now expecting more muted gains in the coming year, according to a Bloomberg survey earlier this month. A key point of interest will be February’s national election, which could unlock more fiscal spending toward a fragile domestic economy.
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