DAX-Sentiment: Reference point makes Italian election look worse

28. February 2013 by Gianni Hirschmüller

Investors had grappled with the prospect of gridlock two weeks ago

27 February 2013. FRANKFURT (Börse Frankfurt). Investors have eyed the lofty levels of German blue-chips with thinly-veiled incredulity since the start of the year. Admittedly, there had been a marked reduction of tail-risk in the eurozone crisis, which justified lower risk premiums and higher stock prices, but how long would it last? A month, a quarter, a year? And what would happen to stock prices in the meantime? So, faced with sizeable cash inflows into their equity funds, many domestic institutional investors simply decided to ‘go with the flow’, at least until some tangible catalyst for a re-inflammation of the crisis came along…

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