Tech Drives AEX to Record High
14/02/2024
Jesse van Steenbergen
Despite ongoing global tensions in regions like Ukraine, and Gaza, and concerns about piracy in the Red Sea, the Netherlands' stock market index, the AEX, reached its highest all-time peak of 831.51. This record high comes after many significant economic events, including widespread layoffs and rising inflation rates.
Reports from CNBC indicate that January's hiring numbers were the second lowest since 2009, reflecting a cautious approach from businesses during these uncertain economic conditions. Martine Hafkamp, director of Fintessa, tells NOS that investors are more focused on the long-term outlook, with interest shifting towards developments expected in the next 9 to 12 months and thus investors might be less concerned about what is going on right now.
Inflationary pressures have been somewhat alleviated by interventions from the central banks, which have resulted in increased interest rates. However, there is anticipation among investors for rates to decrease in the near future, following an announcement from Jerome Powell, the chairman of the Federal Reserve System, and similar actions in Europe.
The technology sector, particularly chip manufacturers like ASML, has seen impressive growth, driving a significant portion of the AEX's gains. ASML alone has surged over 20 percent this year and, together with ASM and Besi, constitutes roughly 23 percent of the AEX index. The overall positive feeling in the market is further supported by the tech sector's resilience during the economic uncertainties.
While the outlook for the AEX appears optimistic, cautionary voices warn against over-optimism, considering potential risks such as the upcoming elections in major economies like the United States and the United Kingdom and possible regulatory changes. Despite these concerns, there are currently no major indicators suggesting a collapse of the AEX, given the prevailing investment climate.
In summary, the AEX's record-breaking performance underscores both the resilience of the Dutch economy and the global market's ability to navigate through challenging times. As investors embrace optimism, it's crucial to stay alert and mindful of potential risks to ensure the AEX's upward momentum stays on track.