Investors favour German midcap shares over blue chips on recovery bets
German midcap stocks are gaining traction as investors bet on a post-election fiscal boost and potential end to the war in Ukraine, with companies like Thyssenkrupp and Lanxess poised for significant gains. The MDAX index has historically traded at a premium to the domestically focused DAX index, but currently trades at a 2.4% discount. If investors are correct, the midcap sector could see a significant upside as the economy recovers.
- This surge in investor confidence highlights the growing disconnect between growth prospects for midcaps and blue chips, where global companies like SAP have been driving the DAX's performance.
- What role will geopolitical events, such as the potential end of the war in Ukraine, play in shaping the market's views on German economic recovery and its impact on midcap stocks?