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Stock markets influenced by political and global economic uncertainties
After the pleasing returns enjoyed in 2015, German blue chips suffered their worst trading start in over 15 years right out of the gate on the first day of 2016 with a fall of 4.3%. The downward slide was triggered by poor economic data out of China as well as the expiry of holding periods for equities that had been imposed there in the summer of 2015 on account of stock market turmoil. Taken together with renewed trading suspensions on the Chinese stock market, the terrorist attack in Istanbul and fears of deflation in the Eurozone, this caused the DAX to touch its low for the year as early as 11 February at 8,753 points. A number of issues prompted heightened anxiety on the German stock exchange as the year progressed, leading to sometimes marked price volatility: the UK’s possible withdrawal from the European Union – which was confirmed by the result of the referendum on 24 June –, terrorist attacks in Brussels and Nice, political unrest in Turkey and speculation about the outcome of the US presidential election. From the third quarter onwards the mood became increasingly more settled, enabling the German DAX bellwether index to close out the year at 11,481 points with a gain of 6.9%.
The MDAX turned in an almost parallel performance: having opened the year at 20,775 points, it fell to its lowest point of the year (17,595 points) in early February. The ensuing rollercoaster ride left the index at 22,189 points after twelve months with a gain of 6.8%. The Dow Jones fared considerably more positively to close the year up 15.3% at 20,330 points.