DAX climbs 1.10% on German inflation data and Fed rate cut hints

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DAX climbs 1.10% on German inflation data and Fed rate cut hints
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The DAX in Frankfurt concluded Wednesday's trading session on a high note, rising 1.10% to close at 16,150.17, buoyed by positive market reactions to German consumer price index (CPI) data and indications from Federal Reserve officials that rate cuts could be on the horizon. The German CPI figures for November suggested a significant easing of inflationary pressures, a development that was well-received by investors.

The index experienced fluctuations throughout the day, reaching a high of 16,167.94 and a low of 15,989.91, ultimately surpassing its previous closing value of 15,975.22. Leading the gains, Infineon (OTC: IFNNY ) Technologies saw its shares surge by 4%, with other noteworthy performers including Zalando, Sartorius, and Siemens Energy, each climbing over 3%. The automotive sector also showed strength, with Vonovia, BMW (ETR: BMWG ), and Mercedes Benz (ETR: MBGn ) Group recording over 2% gains.

Despite the overall market upswing, not all constituents of the DAX shared in the positive momentum. Covestro and Munchener Ruck experienced declines greater than 0.5%.

In the currency markets, the euro saw a slight retreat against a strengthening dollar, with the EUR/USD pair trading within a range of $1.1018 to $1.0969. The Dollar Index , which measures the strength of the dollar against a basket of six other major currencies, inched up 0.15% to 102.90.

German government bond yields mirrored the international trend of declining yields, closing at 2.4510%, a drop of 1.7% from the previous session. This decline in yields is consistent with the softer inflation data and the possibility of a more accommodative monetary policy stance from the Federal Reserve, which could include rate cuts to support economic growth.

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