German DAX Index Posts Best Annual Performance Since 2019, Driven by Technology and Defense Stocks

Frankfurt | EcoPulse24

The German DAX index ended the final trading session of the year up by 0.6%, closing at 24,490 points - its highest level since October 9 - registering its best annual performance since 2019. This achievement highlights the strong momentum in the German stock market compared to other European peers.

Infineon Technologies led the index with a 2.6% gain following CEO Jochen Hanebeck's comments forecasting continued strong demand for AI chips and data center semiconductors, boosting investor appetite for tech stocks.

Defense sector stocks also performed strongly, supported by growing optimism over defense and infrastructure spending under the new German government. Renk shares rose 3.2%, followed by Rheinmetall up 2.3%, and Hensoldt up 1.8%.

In banking, German bank stocks posted notable gains: Commerzbank rose about 1.5% and Deutsche Bank added roughly 1.1%, amid improved sentiment and expectations for more stable global interest rates.

Externally, investors continued to monitor the latest US Federal Reserve meeting minutes and geopolitical developments, mindful of their potential impact on global markets, especially given the still-cautious international economic environment.

For the year, the DAX index recorded strong gains of around 23% in 2025, outperforming most European stock indices, driven by optimism over government spending on defense and infrastructure, as well as strength in leading sectors like technology and heavy industry.

The Frankfurt Stock Exchange will remain closed on Wednesday and Thursday for the New Year holiday, with trading set to resume on January 2, 2026, as investors await market direction in the coming year.