Stocks in Germany rallied after voters in Europe’s biggest economy swung in behind the conservative party at Sunday’s election, putting centrist parties on track to form the next government.
Germany’s DAX 30 rose 0.6% with Christian Democratic Union leader Friedrich Merz likely to become the nation’s next chancellor, although the latest business sentiment survey showed firms remained uneasy in January.
“Germany’s economy has faced cyclical and structural headwinds, but measures of activity have firmed modestly in recent months,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “The outlook for the economy will be impacted by potential introduction of US tariffs and the ability to form a stable coalition after the election on Sunday.”
The kiwi dollar fell to 57.43 US cents at 7am from 57.62 cents yesterday, and traded at 54.84 euro cents from 54.78 cents.
Across the Atlantic, stocks on Wall Street were mixed with the Magnificent 7 stocks broadly weaker ahead of chipmaker Nvidia’s earnings on Wednesday, weighing on the Nasdaq Composite, which was down 0.3% in afternoon trading.
Investors are questioning the scale of spending on artificial intelligence infrastructure after Microsoft’s decision to ditch leases for large data centre capacity in the US, while Apple – which was up 1.1% in afternoon trading – announced plans to invest US$500 in the US over the next four years.
War and peace
Brent crude oil futures were up 0.4% at US$74.32 a barrel at 7am in Auckland as US President Donald Trump said he’s in talks with his Russian counterpart Vladimir Putin to discuss ending the war in Ukraine and major economic transactions. New Zealand yesterday announced extra sanctions on Russian entities and increased its contribution to the World Bank-administered Ukraine support fund.
The UK’s FTSE 100 index was flat, with mining companies declining on weaker iron ore prices as investors continue to mull over the impact of US tariffs and changing demand signals from a major Chinese customer.
Australian futures are pointing to a 0.3% decline on the S&P/ASX 200 index today, where mining companies are strongly represented.
Corporate earnings season continues today, with Tourism Holdings among those reporting.
Travel booking firm Booking Holdings chief executive Glenn Fogel said he expects demand for travel in the US and internationally to remain strong despite rising prices. The operator of the booking.com site also has a partnership with NZX-listed Serko.
Other companies reporting today include Mercury NZ, Property for Industry, PGG Wrightson, and Comvita.
Meanwhile, Indonesia yesterday joined the list of nations launching a sovereign wealth fund, with President Prabowo Subianto unveiling Danantara, which will invest in about 20 projects in sectors such as critical minerals processing, data centres, artificial intelligence. The fund will also manage the assets of seven state-owned enterprises.
Reporting by Paul McBeth. Image from Claudio Schwarz on Unsplash.
