German stocks rose to a fresh two-year record in early trading Monday, with the main index, the DAX, jumping 1 per cent to 4297 in the first hour of trading of the new year. All 30 DAX stocks had gained. The MDAX, which tracks middle capitalization companies, rose 0.4 per cent to 5396 and the technology-oriented TecDAX rose 1.1 per cent to 526. The level of the DAX was the highest since October 2002. The least impressive performer on the DAX board was Deutsche Boerse, operator of the Frankfurt Stock Exchange, which gained just 0.27 per cent to 44.40 euros after dipping as low as 43.75 euros. Analysts said its fortunes had suffered from a report Monday in the newspaper Financial Times that it may have agreed to sell one of its top divisions, Clearstream, in order to win approval of its takeover offer for the London Stock Exchange. Clearstream, which manages settlements, has the largest turnover of any Boerse division. In Frankfurt, a spokesman denied the report, saying, "Clearstream is an integral part of Deutsche Boerse." The euro, which had reached a record against the dollar as the old year rang out, eased in the first Frankfurt foreign exchange trading of the new year Monday, changing hands at 1.3448 dollars. On December 30 it had peaked at 1.3668 dollars, while Friday's European Central Bank (ECB) reference rate was 1.3621 dollars. Traders cautioned that the Monday rate, equivalent to 74.32 euro cents per dollar, was based on very low volumes. Japan's forex market remained closed because of public holidays. Trading was also much reduced in late December. United Overseas Bank said that the respite in the dollar's fall was not likely to last long, since markets still doubt that the United States can in the long term finance its worsening government deficit and growing trade deficit.
