Stock market records also pay off for private individuals

The Dax creates another record and the European share index climbs to its highest level since the financial crisis in 2008. According to the Bundesbank, Germans’ financial assets are now higher than ever.

Big pile: According to the Bundesbank, the financial assets of German private households are higher than ever.

Dhe unbroken record rally of the American stock exchanges, impressive economic data from China and some strong quarterly reports gave a boost to Europe’s stock exchanges on Friday.

The German leading index Dax rose by 1 percent to a record high of 15,407 points by noon. For the first time since 2008, the leading Eurozone index, Euro Stoxx 50, passed the 4,000 point barrier. In Paris the Cac 40 hit a new high since 2000 and in London the FTSE 100 rose above 7000 for the first time in more than a year.

“The Chinese economy continues to grow at full speed and the first companies in the USA have impressed with their quarterly figures,” commented market expert Andreas Lipkow from Comdirect. With a view to Europe, he also referred to the better-than-expected numbers of the German carmaker Daimler for the first quarter and also the strong sales figures of L’Oreal.

As published from China, the economy there has largely overcome the corona crisis and started the new year with record growth. In the first three months, the world’s second largest economy grew by a little more than 18 percent compared to the first quarter of the previous year. However, compared to the final quarter of 2020, growth was meager.

Once again, auto values ​​were ahead of the rest of the individual industries in Europe. The Stoxx 600 Europe Autos & Parts gained 1.5 percent, followed by the banking sector, which rose 1.1 percent. Apart from Daimler, which increased by 2.5 percent, and VW with plus 1.6 percent, Renault was also very strong with plus 2.8 percent and Stellantis with plus 1.0 percent.

Stock market profits increase wealth

Despite the virus pandemic and years of ultra-low interest rates for savers, Germans are getting richer. At the end of last year, private households had more financial assets than ever before, at EUR 6.95 trillion, as shown by the Bundesbank’s figures published on Friday.

Compared to the end of the third quarter, that is an increase of 3.1 percent. The main cause of the increase was the increase in cash and household deposits. But profits on the stock exchanges are also behind the increase.

DAX ®

— (–)
  • 1T
  • 1W
  • 3M
  • 1J
  • 3J
  • 5J

To the detailed view

The stock market boom is also having a positive impact on the financial situation of Germans. The exposure to cash and bank deposits, which are quickly available funds for private households, increased by 74 billion euros in the final quarter of 2020. Claims against insurance companies increased by 21 billion euros.

Tailwind from the financial market

Price gains on the financial markets provided a lot of tailwind. Overall, the valuation gains for shares and other equity rights were 61 billion euros. “Private households remained very active on the capital market in the fourth quarter,” declared the Bundesbank. Shares and shares in mutual funds were popular. Households increased their exposure to these securities by 21 billion euros in the final quarter. Investment certificates and foreign stocks were in high demand.

As in the previous quarters, private households used the ultra-low interest rates to borrow money cheaply from domestic banks. Once again, there was a particular demand for housing loans. Overall, household liabilities increased by 24 billion euros to 1.96 trillion euros in the fourth quarter.