German equities experienced a positive performance for the second consecutive trading day, with the blue-chip DAX index rising by 0.80% on Tuesday, driven by a widespread market rally following China's new stimulus package. To reignite its economy, China has introduced a series of decisive measures including cuts to the seven-day repo rate, reductions in loan prime rates, and adjustments to the medium-term lending facility rate.
Policymakers in China, recognized as the world's second-largest economy, have also pledged to lower mortgage rates as a response to ongoing concerns regarding its property market. Analysts from Macquarie commented, "Following the Fed pivot last Wednesday, the PBoC also pivoted with a new focus on fighting deflation.
Today's policy announcements are more positive than expected, although this alone may still not be enough to end the longest deflationary streak since 1999. However, it could herald the beginning of the end as it reflects the increasing urgency among top leaders to tackle deflation in China." Domestically, the ifo Business Climate Index reported a decline for the fourth consecutive month, dropping to 85.4 points in September from 86.6 points in August.
According to the ifo Institute, this deterioration in outlook suggests that Germany, as Europe's leading economy, is facing "ever-increasing pressure." On the corporate front, Deutsche Post, also known as DHL Group, has launched its Strategy 2030, aiming for a significant 50% increase in revenue by 2030 compared to levels achieved in 2023.
The German logistics giant saw its stock rise by 1.59% at closure. "There is no spin-off of any division. However, DHL is at least taking action that would facilitate this in the future. The legal structure remains complex, with P&P intertwined with the group holding company. In the coming years, this legal framework will evolve to align more closely with the management structure that investors are familiar with.
This evolution could reduce central overhead costs and make any future separation more straightforward," Bernstein remarked..