Investors relieved after German election

European stock markets responded positively to the news that Friedrich Merz is likely to be the next German Chancellor. The German DAX index rose by 0.8%, while the Danish C25 index increased by 0.5%. Investors are relieved that the far-right remains without influence, with the worst-case scenario avoided. Jacob Pedersen from Sydbank believes the new government will exhibit more decisiveness than its predecessor and highlights that investment in Germany has been lacking. Relaxing the debt brake to stimulate the German economy is seen as crucial not only for Germany but for the entire European region. Danish companies Ørsted and Vestas saw stock increases, with Ørsted attributing some of its gains to falling U.S. interest rates. Vestas, already active in Germany, anticipates further business expansion, notably in land-based wind turbines, as conditions for wind power have improved under the former government. Vestas’ shares went up by 0.75% by Monday afternoon.