GER40

The GER40, also known as DAX 40 or just DAX, is a stock market index tracking the performance of 40 German blue chip companies, including giants like Adidas, Bayer and Porsche. Historically, this index had only 30 stocks and used to be named GER30 (DAX 30) but was expanded by adding ten more companies in September 2021.

Like other major indices representing large economies, the stocks within the GER40 are weighted by a free-float market capitalization, meaning only shares that are available for public trading are taken into consideration.

Listed on the Frankfurt Stock Exchange – the marketplace of the largest economy in the EU – the GER40 is seen as a strong measurement of not only German economic health but also Europe as a whole.

The euro exchange rate is considered the key driver of the GER40 price and usually has a negative correlation with it. This correlation happens primarily due to the international trade cost – a weak euro increases the cost of German export, while a strong currency makes it cheaper.

Due to the constitution of the index and the large weighting the top 10 companies have, the GER40 is also heavily affected by their quarterly and annual earnings reports and forecasts.

Besides the other common economic and political factors like interest rate releases and elections, the GER40 can be very sensitive to worldwide crises due to a lack of technology stocks. The coronavirus pandemic, for example, has seen a much larger decline in the GER40 value compared to US indices that were pulled up by the high performance of tech companies.