Skip to content

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

DAX 40 nears record highs as German economy anticipates growth under new leadership

German markets rally on new coalition government formation and potential United States tariff relief, while European indices show mixed performance amid contrasting economic data.

DAX Source: Adobe images

Mixed market reactions across European indices

European equity markets started the new week with mixed results. The Germany 40 (DAX 40) rose by over 1%, while the France 40 (CAC 40) fell by 0.6%. Meanwhile, London and the FTSE 100 enjoyed a long weekend due to the May Day public holiday.

German political landscape shifts with new coalition

In Germany, the conservative-led coalition finalised its agreement, paving the way for Christian Democratic Union (CDU) leader Friedrich Merz to be sworn in as chancellor later today, following the German election in late February.

The coalition between the CDU/Christian Social Union (CSU) and the Social Democratic Party (SPD) plans to stimulate economic growth, increase defence spending, tighten migration policies, and modernise infrastructure.

Economic factors driving market movements

The prospect of stronger economic growth along with easing concerns over United States (US) dollar tariffs, particularly following reports of potential relief for the auto industry, has contributed to the revival of the German stock market. Notably, the rally has occurred despite first quarter (Q1) 2025 gross domestic product (GDP) data last week showing the German economy contracted by 0.2% year-on-year (YoY), marking the seventh consecutive quarter of recession.

In contrast, the most recent GDP report in the United Kingdom (UK) showed expansion of 0.6% in the three months to February 2025, the strongest increase since the three months leading to May 2024. This, along with the high probability of another Bank of England (BoE) 25 basis point (bp) interest rate cut this week, has been behind the FTSE's record 15 consecutive days of gains.

FTSE 100 technical analysis

From its record high of 8908, the FTSE fell 1364 points to a low of 7544 in early April before its impressive rebound, which at Friday's high took it to within 286 points or approximately 3.3% below its record 8908 high of March this year.

We do not currently hold a high-conviction view of what comes next in the medium term. However, in the short term, and given the overbought nature of the rally, there is a good chance of a pullback early this week. Dip buyers will likely be operating near the 200-day moving average (MA) at 8351, and provided it holds, they will be looking for a retest and break of the 8908 record high.

FTSE 100 daily chart

FTSE 100 chart Source: TradingView
FTSE 100 chart Source: TradingView

DAX 40 technical analysis

From its mid-March double top at 23,746, the DAX fell 4987 points to a low of 18,489 in early April, before its impressive rebound, which at last night's high took it to within 112 points, less than 0.5% from its record 23,476 high of March this year.

We don't currently hold a high conviction view of what comes next in the medium term.

However, in the short term, and given the magnitude of the rally over the past month, it seems unlikely it would come all this way without making a fresh record high before a more significant pullback.

DAX 40 daily chart

DAX 40 chart Source: TradingView
DAX 40 chart Source: TradingView
  • Source: TradingView. The figures stated are as of 6 May 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Equities
  • Indices
  • Forex
  • Commodities


Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.