The German DAX Falls at the Open As No Coalition Was Agreed Upon

Where does DAX sit with Brexit deal?


On Monday, the German Stock Market fell due to reactions of investors to the news that Angela Merkel, the German Chancellor’s party and the Social Democrats could not agree to a coalition government on Sunday.

The talks are expected to take place between the two parties on Monday and perhaps beyond.

German DAX opened a 100 points lower on Monday morning at 12, 685 before it declined further to trade 140 points or 1.1% lower. The market is concerned about the possible result of the talks between Merkel’s Christian alliance of Christian Democrats and Christian Social Union (CDU-CSU) and the SPD.

Chancellor Merkel spoke on Sunday that her conservative union came across tough negotiations with the SPD.  According to report by Reuters, the parties had arrived on a decision on agriculture, energy and migration but carried on debating about the labor and healthcare policies. Merkel said that she found it hard to tell how long these talks could last.

The global market sell-off is not really helpful at the moment either. Months have gone by since the federal election of the county took place in September 2017 that failed to give a winner. The outcome led to talks between both the major and minor political parties of the country targeted at forming coalition government.

Late in 2018, the SPD had agreed reluctantly so to carry out coalition talks with Merkel’s conservative bloc after her failed attempt to from a coalition government with other parties the Free Democrats and the Green.

SPD has been with Merkel in the government in the past so it is suffice to say that this is a tried and tested union. But SPD led by Martin Schulz has vowed to remain in opposition earlier. The party, in return for backing has said that it will extract deep concessions from the CDU-CSU and as a result making talks more combative.

The political uncertainty is being observed quite closely by other member states as Germany happens to be the single currency bloc’s strongest and biggest economy.