European stocks rallied after German data shown unemployment staying at the lowest level since the reunifications. DAX Index, the benchmark of German economy increased after the federal statistics office announced the numbers. Other European equities followed. In a good news is bad news world we live, this may be seen as a delay in ECB stimulus so the market was a bit down in the later part of the session.
DAX is reaching two month highs as the unemployment data showed the rate remained at 6.6 percent, same as the revised data for October. After positive sentiment and business confidence data of last few days this just confirmed that the rout German economy experienced as the result of the sanctions against Russia and uncertainties stemming from unclear geopolitical situation.
This is the 11th day DAX has been rising on the better economic outlook in the biggest economy of Europe. The Stoxx Europe 600, the broadest european measure climbed 0.3 percent to 347.24. DAX rose more than 0.5 percent to end on 9,979 points at 14.50 GMT. IFO institute business confidence index rose three days ago spurring the rally unexpectedly. It was falling for months before.
The news is coming super positive for Germany at the moment, when one thinks most expectations were actually worse. Optimism that exporters will benefit from a weaker euro has helped boost German shares, with the DAX heading for its highest close since July. Draghi’s promises to consider buying government debt of Euro area nations, the Stoxx Europe 600 rose 12 percent from the low in October.
National benchmarks also rose after Euronext NV technical incident, while energy stocks were the biggest losers with a 1 percent minus as the OPEC met to discuss strategy how to deal with ever increasing supply of US shale oil. The first tries included killing of shale gas producers, but the next move may include cutting production as low price is undermining fiscal stability.