Frankfurt - Frankfurt stocks traded higher Monday, buoyed by the impending turn to the right in Germany's government, with investors bidding up the value of nuclear-power station operators. At the close of electronic trading, the blue-chip index, the DAX, had risen 2.8 per cent to 5,736.31.
"It took a while but after a few hours the market was agreed that the winners were ideal for the stock market," said Christian Schmidt of public bank Heleba.
He was referring to the remaking of Chancellor Angela Merkel's coalition government, with a new partner, the pro-business Free Democratic Party (FDP), replacing the Social Democrats as number-two party.
The new government is expected to seek ways to lengthen the lifespan of existing nuclear power plants.
Two companies that own such plants made major gains in trading. Eon rose 4.5 per cent to 29.48 euros and RWE gained 4.2 per cent to 64.80 euros.
The new government policies are to be set in talks between Merkel's Christian Democrats (CDU) and the FDP.
RWE said it was expecting those parties to implement pre-election promises on nuclear power.
Investors were wary of manufacturers of solar generation equipment, since the FDP has demanded a wind-back in subsidies for German homes and factories that set up photovoltaic panels on roofs.
Stocks in three such firms, Q-Cells, Centrotherm Photovoltaics and Solarworld, tended slightly softer.
"As a rule, the market reacts positively when the CDU and FDP win an election," one analyst said.
Business leaders are hoping the government will pare back some taxes on business and perhaps reduce social-welfare spending. Chemicals companies are seeking special tax breaks for research and development.
Business is also pressing for the repeal of a 2008 tax law that sets a cap on the rate of tax-deductible interest payments, a measure that was intended to stop multinationals using accounting to shift profit abroad.
