Germany: DAX Continues Record Run.

The DAX in Frankfurt extended gains to close about 0.9% firmer at 25,122 on Wednesday, setting another record high and outperforming its regional peers. Optimism about a German economic recovery in 2026, supported by the federal government’s billions in infrastructure and defense spending, remains a key driver. At the same time, ongoing geopolitical tensions and unresolved conflicts continued to boost demand for defense stocks. Sentiment was further boosted by hopes of falling oil prices following the US attack on Venezuela, which could ease inflationary pressures and pave the way for further central bank rate cuts. Eurozone inflation slowed to 2% in December, matching the ECB’s target and supporting expectations that rates will be maintained for now. Among stocks, Hensoldt (5.9%), Rheinmetall (4.4%) and Renk (3.5%) were among the top performers. Other notable advancers included Zalando (4.9%), Siemens (3.5%), MTU Aero Engines (3.1%), Heidelberg Materials (2.9%) and SAP (2.8%).