Germany’s main stock index ended its biggest two-year rally in more than a decade, outperforming other European indices, according to Bloomberg.

In particular, today the DAX closed up 19% for 2024, extending the rally since January 2023 to 43%. While the index has lagged behind the S&P 500 in the US for 2024, it has far outperformed its regional peers, including the UK’s FTSE 100 and France’s CAC 40.

It is noted that German markets will remain closed on New Year’s Eve and January 1, while trading will resume on Thursday.

Expectations of a healthy global economy and a recovery in China have supported German shares at a time when the domestic economy is facing challenges. SAP SE was the biggest contributor to 2024 gains as investors sought technology stocks, accounting for nearly a third of the index’s rally.

A more than 300% gain for Siemens Energy AG contributed to the outperformance, while rising defense spending helped Rheinmetall AG’s share value more than double.

These strong performances helped offset difficulties in some of Germany’s key sectors.

Auto stocks were hit by falling demand and the growing strength of Chinese electric vehicle makers, with Volkswagen, Porsche and BMW all losing 20% ​​or more. Bayer was the biggest loser, down 43%, as the company grappled with its turnaround plan and legal battles.

Analysts now expect more subdued earnings in 2025, according to a Bloomberg survey earlier this month. A key point of interest will be national elections in February, which could unlock more fiscal spending for the fragile domestic economy.