Germany's benchmark DAX index is expected to extend its upward trend at least until the end of 2010, after having made significant gains in the first months of the year, a Reuters poll found.The DAX was seen ending 2010 at 6,500 points, up about 9 percent from the 5,957-point close of 2009, according to the median of 30 equity strategists' forecasts. That is also higher than the 6,100 predicted in the March poll.However, the 5,400-7,300 forecast range for end-2010 in the latest survey suggests that there is little consensus about just how tough the second half of this year will be.For mid-2011 the spread of predictions was even wider, with values ranging from 5,000 points to 7,700, pinning the median forecast of 26 strategists at 6,600.The range of views for mid-2011 indicated there is little consensus about what the index will do next year.The DAX, comprising 30 top stocks in Europe's largest economy, rose 24 percent in 2009, recovering from 2008 -- the worst year for markets since the Great Depression in the 1930s."We previously believed that the markets would face more headwind in the second half of the year after a good first half," Carsten Klude from MM Warburg wrote. "This scenario has become less likely," he added.Klude also said that recently released economic data does not indicate a double-dip scenario is to be feared."Although government stimulus programs will gradually expire in the second half of 2010, it currently looks as if private demand will be strong enough to close the resulting demand gap for the most part."Christoph Riniker from Julius Baer was also optimistic about the forecast for the next six months and the coming year."Germany's strong position within the euro zone is certainly a factor which will work in favour of the DAX," he said, predicting the index to rise to 6,900 by the end of the year and continue to prosper, reaching 7,200 points by mid-2011.Strategists, such as Postbank's Heinz-Gerd Sonnenschein, tended to agree that, regarding the period from the start of the year until mid-2011, the DAX had already troughed.SHORT-LIVED EUPHORIANot all analysts agree on continued growth though, with some predicting that the start of next year could see a new dip."The outcome depends massively on investor's willingness to buy state debt," Frank Schneider at Alpha Trading said.Confident that the DAX would hit 6,500 points at the end of the year, Schneider forecast a dip to 5,500 by mid-2011.Close Brothers Seydler strategist Roger Peeters expects the index to rally high until the end of the year too, peaking at 6,400 points, but sees it dropping to 6,000 after that."The short-lived euphoria of the strong market is now being weakened once again by the weaker euro," Michael Drill from Lincoln International said. He predicted that the DAX would stand at 6,150 at the end of the year, before dipping to 5,850 points mid-2011.The DAX, dominated by industrial companies that earn most of their revenue and profit abroad -- such as engineering conglomerate Siemens, carmakers Daimler and Volkswagen , steel group ThyssenKrupp and chemicals maker BASF -- is more of a global growth proxy than a reflection of the health of the German economy.Since hitting a 2010 low of 5,433 points at the beginning of February, it has regained strength, closing at 6,204.52 on Wednesday.News posted by www.newsinfoline.com
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