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DAX (GER 30) is a stock index that appeared in FSE in 1988 with the reference price set at 1000 in 1987. Originally inherited the stock index in Germany, it is the GER 30 consisting of 30 companies out of the best German companies. By the way, all 30 companies are listed on the Frankfurt Stock Exchange.
DAX is called the German Stock Index in Japan. Germany is the fourth largest economy in the world and is the largest economic power in Europe. Therefore, in Europe, it is one of the indices globally watched alongside the French economic index CAC 40 and British economic index FTSE 100. It is a stock index that CAD trading is possible even in Japan. Periodic review of constituent stocks is done once a year.
Although DAX is the largest share index in Germany, it also covers CDAX that covers all German corporate stocks listed on the Frankfurt Exchange, as well as the top 50 companies outside the technical field following DAX. There are SDAX and the likes, targeting the top 50 companies outside the technical field following MDAX and MDAX. In addition, TecDAX is a stock index targeting the top 30 companies in the technical field following DAX.
DAX has grown rapidly in the years since birth. In 1993, due to the influence of the bubble, exceeding 2000 points, exceeding 5000 points in 1998 when the Internet began to spread rapidly. The momentum did not stop even in the 21st century, and in 2000 it recorded the highest ever recorded 7,500 points.
However, after putting the highest price in 2000, it turns into a declining trend due to the collapse of dotcom bubble. In 2003 it fell to 2,500 points, and the economy became cold worldwide. As the economy turns up again, the stock index turns to rise. Before the financial crisis of 2008 occurred it had recovered to 7,500 points. However, immediately after the global financial crisis has occurred, it has collapsed and records the highest crash range in the past.
It temporarily declined due to the global financial crisis but once again it began to rise and it is worth more than 10,000 points in 2015. Looking at the history of DAX, a periodic big crash is occurring. In terms of average data, the cycle of crash is about 6 years and 5 months. There are also ways to predict from the past price movements in the stock index forecasting method.
The falling range is the largest due to the collapse of the IT bubble in 2000, and it has recorded a decline rate of 72% in three years. In the short term, it recorded a decline rate of 50% in one year at the time of the Lehman shock that occurred in 2008. Investors are predicting that a declining rate exceeding 20% occurs with a short span, so that there is a high probability that a large decline will occur in the near future.
Speaking of German companies, I think that many people imagine the automobile industry. However, the field of companies with large market capitalization at DAX is chemicals. World famous chemical companies such as Bayer and BASF are named for DAX. There are companies in the fields of chemistry and medicine such as Merck, Henkel, Covestro, Baiersdorf.
The automobile industry is also an important position in constructing DAX. BMW, Daimler, Volkswagen and other automobile manufacturers familiar in Japan are included. In addition, Adidas popular sporting goods brand in Japan is also one of the constituents of DAX. Because there are many companies deeply related to Japan, DAX is also characterized as having a high relevance to the Japanese economy.
DAX has deep ties with the euro area economic indicators. If the announced economic indicator is steady, DAX easily rises. Because Germany is exporting to many European countries, the more active the economy within the euro area, the more it will be the economy of companies that are named for DAX will rise. However, as the euro's appreciation becomes more pronounced, export-related brands will decline, so the rise will be limited. There is no guarantee that the DAX affiliates will be upward in the economy due to the euro's rise, and the economy will be declining due to the euro's rise [economic activation in the euro area = rise in DAX].
German economic indicators directly affect the price of DAX. Even the unemployment rate, which is also an important factor in foreign exchange trading, if the unemployment rate rises, the economy will be sluggish due to the uncertain economic outlook, which will lead to a decline in DAX. Germany keeps the unemployment rate at a low level when looking in Europe. While showing that the economy is doing well, it cannot ignore the possibility that the surge in the unemployment rate associated with the bankruptcy of large corporations will lead to a drastic drop in DAX.
The economic indicator that is a parameter of German business confidence is manufacturing orders. Because the manufacturing industry is the basis of economic activity in Germany, good indicators of manufacturing orders lead to an upward economic factor. From a broader perspective, it is expected that a certain amount of production will be promised if the indices of manufacturing orders are good, which will lead to an increase in employment and a decrease in the unemployment rate.
Since we export a lot, if the economy of the related country is sluggish, there is also a risk that the export will decrease and have a big On the other hand, there is a history that has recovered even if it fell greatly, so it can be said that it is a stable stock index from a broad perspective