Elections in Germany: DAX40 and other equities

During the turbulent beginning of Donald Trump’s presidency, other vital political events are happening, including elections in Germany. DAX40, after its recent successes, has to find itself in the new political reality.

The results of the German elections

Here are the essential takeaways from Sunday’s elections:

There is a change at the chancellor’s place – Olaf Scholz, the leader of the socialist party SPD, was replaced by Friedrich Merz from conservative CDU/CSU, which obtained 28.52% of votes.

It was the biggest downfall of SPD in decades.

Scholz and his party are not even the second force in the Bundestag. Far-right AfD won 152 seats with almost 21% of support. Alice Weidel’s party won in almost every region in Eastern Germany, excluding Berlin and Leipzig.

However, AfD will probably not be included in the next coalition. Its political opponents claim that this party holds the most extremist views since World War II.

Before elections in Germany, DAX40 experienced noticeable falls. Analysts pointed out that investors were uncertain of the results. What’s happening a few days after the CDU/CSU victory?

How did the German elections impact DAX40?

Since the beginning of August and the so-called “Black Monday,” DAX40 has been recording a stable yet noticeable growing trend. Despite some worrying signs in October and November, the most prominent German index recorded a rise of over 5,000 points from summer to February 2025, surging from the 17,000 level to over 22,500, breaking its ATH multiple times during this period.

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However, before elections in Germany, DAX40 experienced substantial losses, going down from almost 23,000 levels to approximately 22,150 in just a few days. Traders couldn’t decide whether AfD – the new, not-so-predictable force in the Bundestag – would win the Sunday elections.

Nevertheless, the victory of CDU/CSU brought a positive reaction to the market. DAX40 has been rising for three days straight, returning to its growing trend.

Noticeable movements in the German stock market

February 24th brought the beginning of the rise of several equities listed on the biggest index in the Frankfurt Stock Exchange. After the elections in Germany, DAX40 has come back on the right track, and some companies have contributed significantly to that.

Lufthansa has seen significant fluctuations in its stock price throughout the last couple of weeks. Together with internal political uncertainty, the potential ceasefire in Ukraine can open up new flight connections. After the elections in Germany, the LHA stock price grew from slightly above 6.300 to almost 6.800 in just a couple of days.

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Financial institutions tend to come together with major national and regional indices. Traders treat them as the barometer of the current sentiment. Deutsche Bank showcases that investors reacted positively to the outcome of elections in Germany. DAX40 and the DBK.DE stock price look almost like a mirror image during the last months.

Elections in Germany & DAX40: Conclusion

After the recent elections in Germany, DAX40 demonstrated resilience and recovery. The index bounced back robustly as Friedrich Merz’s conservative CDU/CSU party claimed victory, replacing Olaf Scholz’s SPD. This significant political shift has positively influenced investor sentiment, leading to a noticeable uptick in the stock market. The DAX40’s recovery highlights the strong connection between political stability and economic indicators, reaffirming the index’s role as a barometer for economic and political climate changes in Germany.