Defense Stocks Surge Powers German DAX Index Gains

11:51 AM EST, 01/05/2026 (MT Newswires) -- The German DAX index extended its gains at the start of a new trading week, closing 1.29% higher on Monday, amid a rally led by defense companies following the US military intervention in Venezuela. German arms manufacturer Rheinmetall (RHM.F), military and civilian propulsion systems manufacturer Renk Group (R3NK.F) and defense technology company Hensoldt (HAG.F) respectively surged 9.36%, 8.50% and 8.16%. Rheinmetall was the best performing stock of the blue-chip index. In other corporate updates, AlphaValue/Baader Europe noted a "clear" downward pricing trend in property reinsurance following January renewals, with higher-than-expected declines of more than 10%. "While a degree of market softening in property catastrophe was widely expected, the magnitude of the decline appears to have been more pronounced than anticipated. Profitability in this segment is set to decline from the current very healthy levels over the coming years, although the market is generally viewed as having remained rational," the research firm wrote. AlphaValue/Baader Europe highlighted Hannover Re (HNR1.F) as the "most exposed" in its coverage, whereas Munich Re's (MUV2.F) diversified business mix softens its exposure to property reinsurance headwinds. Hannover Re gained 0.08%, while Munich Re was off 0.07%. On the economic front, market watchers are awaiting key data this week, including preliminary December inflation figures in Germany and the wider eurozone due on Tuesday and Wednesday, respectively, German factory orders on Thursday and German industrial production and trade balance on Friday. "This isn't a print expected to have too many implications for near-term [European Central Bank] policy, with markets expecting them to keep rates on hold for the rest of the year. However, headline inflation is expected to fall below the 2% target early this year, largely driven by energy base effects. And our economists think that if the decline for headline inflation is large enough, that could spill over to weaken core and inflation expectations too, which would lower the bar for further policy easing. So that'll be a key theme for H1," Deutsche Bank Research said.