Closing DAX: Union election victory helps the second row – daily winner: Rheinmetall

The stock market is breathing a sigh of relief. After the Union's victory in the federal elections and a probable two-party coalition, German shares are gaining today. The MDAX is particularly in focus. The stock market barometer closed with a gain of 1.52 percent at 27,918.55 points. The index, in which medium-sized companies are listed, has thus further closed the gap it has lost to the DAX over the course of the year so far. The German leading index rose on Monday by 0.62 percent to 22,425.93 points.

The MDAX has performed worse than the DAX in recent years. It thus reflected the situation of medium-sized companies, which are more dependent on Germany's economy and have therefore suffered more from Germany's economic downturn than the globally positioned companies in the DAX. Since the beginning of the year, the MDax is now up almost 9 percent, while the DAX has grown by a good 12 percent. The small cap index SDax also rose slightly more than the DAX on Monday, with a plus of 0.9 percent.

However, despite a two-party solution, the coalition negotiations could be lengthy and unproductive, thus preventing the market from making further leaps of joy, warned analyst Konstantin Oldenburger of CMC Markets. "This is another reason why the issue of a further correction of the overheated share prices in the DAX may not yet be off the table and at least a further decline towards 22,000 points could occur," said Oldenburger.

Despite this, the mood in the German economy remained skeptical in February, as the unchanged Ifo business climate index of 85.2 points revealed. Economists had expected a slight increase to 85.8 points on average. Further developments in the coming months will probably depend on how the coalition negotiations develop, said Thomas Gitzel, chief economist at VP Bank.

There were numerous election profiteers on the stock market at the start of the week. In addition to bank, utility and defense stocks, real estate stocks were also among them. Vonovia gained 3.3 percent in the DAX. Hypoport gained 5.2 percent in the MDax. Investors are banking on the economic expertise of the CDU/CSU faction. At Hypoport, experts at Berenberg Bank are expecting new momentum for the B2B credit marketplace Europace.

Rheinmetall gained 6.4 percent at the top of the DAX. The new federal government should have some leverage to increase defense spending, wrote analyst Sven Weier from UBS. The bank upgraded Rheinmetall shares to "Buy." Shares in defense electronics specialist Hensoldt and tank transmission manufacturer Renk rose by 4.6 percent and 3.0 percent respectively.

Delivery Hero's major shareholder Prosus wants to take over Lieferando's parent company Just Eat Takeaway in a billion-dollar deal. Some analysts see this as a first step towards a merger with Delivery Hero, according to market reports. After initially making significant gains, the shares of the food delivery service listed on the MDAX turned negative in the last minutes of trading, ending up losing 1.0 percent.

Contains material from dpa-AFX