Market report: DAX approaches record high

German stocks rallied after the US midterm elections, with the DAX close to its all-time high, while oil prices fell.

The broker IG Markets expected the DAX to open about 0.5 percent higher at 26,561 points, after it rose 2.2 percent to 26,437 on Wednesday. The index came within 78 points of its record of 26,619 points that day. IG analyst Salah-Eddine Bouhmidi said the record could be tested in the coming days if momentum holds and buyers keep the index above 26,000, but geopolitical uncertainty and the risk of sharp setbacks remain.

Investors welcomed the Democratic election win as a possible check on US budget policy. CMC Markets analyst Andreas Lipkow said it could ease worries about rising public debt and high long-term bond yields, and raised the chances of a year-end rally. Dekabank expert Joachim Schallmayer said the result showed that Donald Trump's policies are "not limitlessly enforceable," though dramatic policy shifts are not expected. Defence stocks such as Northrop Grumman and Lockheed Martin came under pressure over expected budget hurdles in Congress.

Oil prices fell, with Brent down 1.0 percent to 93.63 dollars per barrel, as many investors expect a peaceful solution in the Middle East to be more likely. Lower oil prices would reduce inflation pressure and could improve corporate earnings. Wall Street gained, with the Dow Jones up three percent. In Asia, Japanese technology shares fell on worries about the AI sector, while South Korea's Kospi lost about four percent and trading was briefly halted.

Key points

• The DAX was expected to open at 26,561 points, close to its record of 26,619.
• Democratic wins in the US midterms lifted European and US stock markets.
• Brent fell 1.0 percent to 93.63 dollars; WTI fell 1.5 percent to 86.81 dollars.
• The Dow Jones closed three percent higher at 53,356 points.
• Tech shares fell in Asia over fears of a slowing AI boom.