Germany’s high-stakes federal election is scheduled for Sunday. European stock markets are pricing in a near-perfect result. However, the risk is that investors may be more vulnerable to unpleasant surprises from the election outcome. The German benchmark DAX index and other European stock indices have set new records repeatedly this year.
That is largely driven by hopes that the next German administration would have a strong parliamentary majority and implement long-overdue reforms to revive the economy.
European shares break record highs
The German stock index has outperformed the US and European peers since the snap election was called. However, some analysts warn of the risks of betting on a definite outcome or underestimate the likelihood of market volatility. Last year’s surprise European parliament elections, which toppled the French government and led to a deep sell-off in markets, is a fine example of…
