Mecklai graph: DAX, FTSE 100 movement year-to-date

Mecklai graph of the day: DAX and FTSE 100

The European Equities have seen an upsurge since the beginning of Jan 2013 as seen in the below graph with both FTSE and DAX largely represents other European indices. The London FTSE marched to almost 12-year high and Germany’s DAX tested record high with both have gained more than 10 percent in 2013. Equities tumbled sharply during financial crisis in 2008-09, however slowly and gradually they gathered momentum with major turning point was ECB message offered by Mario Draghi in 2012 stating that he will do whatever to save Euro, thus boosting confidence among investors. Investors were cheered post announcement of quantitative easing either in form of printing money or keeping interest rates record low by various central banks to boost global economy, with recent one was Bank of Japan. The lower returns from government bonds due to lesser interest rates and not as much of attraction from commodities such as precious metals has flocked investors to shift towards equities to fetch higher returns. In current scenario, we don’t think central banks are likely to withdraw their ease monetary polices soon; hence investors would continue to enjoy the recent rally but on other hand would interesting to watch that the current euphoria will last reckoning weaker fundamentals. The graph represents the European equities as FTSE 100 is represented on the Y axis (left) and Dax is Y axis (right).                     Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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