Yahoo Finance German DAX hits new high as auto and banks stocks surge
European stocks closed higher on Tuesday, as a late surge for financial stocks and car makers helped propel indices higher.
Germany's DAX (^GDAXI) twice broke through key levels to reach new highs on Tuesday. It closed up 1.3% at 15,008.61.
The index was helped higher by rallying auto stocks. Volkswagen (VOW3.DE) rose 4.5% as it announced plans to change the name of its US subsidiary to "Volkswagen" — a signal of ambition in the electrical vehicles market. Elsewhere, BMW (BMW.DE) gained 3.7% and Mercedes Benz owner Daimler (DAI.DE) rose 3%.
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Stocks across Europe were higher. The CAC 40 (^FCHI) rose 1.2% in Paris, the IBEX (^IBEX) gained 1.2% in Madrid, and the FTSE MIB (FTSEMIB.MI) rose 0.8% in Milan.
The FTSE 100 (^FTSE) was an under performer in London, rising just half a percent. The index was dragged down by tobacco and utility stocks.
Banks and other financial stocks rallied thanks to rising yields. Barclays (BARC.L) climbed 4.8% to reach a two-and-a-half-year high and the Euro Stoxx Bank index (EXX1.DE) rose 3%, erasing Monday's losses as investors shrugged off concerns about the collapse of Archegos Capital.
READ MORE: Banks stabilise as Archegos Capital impact becomes clearer
Investors were focused on a major investment speech Biden is due to make on Wednesday, which will set out the details of a huge stimulus package. The scale means the ripple effects are likely to be felt across the globe.
"An interesting dynamic is that the US Treasury curve is steepening even as equities are rallying, suggesting the recovery in equities is now under way," said Sebastian Galy, a senior macro strategist at Nordea.
"Both are happening ahead of the release of the next fiscal plan in the United States, reportedly $3tn [£2tn], $1tn in physical infrastructure and $400bn in Green initiatives. This is happening at the same time as we get positive news on vaccines in the US and a faster roll-out there."
US stocks were lower in New York. The S&P 500 (^GSPC) and Dow Jones (^DJI) were both 0.4% lower by the time Europe closed and the Nasdaq (^IXIC) had shed 0.3%.
Stocks in Asia were broadly positive overnight. Japan's Nikkei (^N225) rose 0.2%, the Hong Kong Hang Seng (^HSI) gained 0.9%, the Shanghai Composite (000001.SS) rose 0.5% and the South Korean KOSPI (^KS11) rallied 1.1%.
Japanese bank Nomura (8604.T) fell 16% in Tokyo on Monday after warning it could face a $2bn loss from the collapse of hedge fund Archegos Capital. Shares stabilised on Tuesday, falling just 0.6%.
