German Stock market advance strongly now that CDU/CSU/FDP win

So what do stockholders think of relatively less regulation and taxes?

German stocks posted the biggest gain in five weeks after Chancellor Angela Merkel won re- election with enough support to govern with the pro- business Free Democrats. Utility companies paced the advance.

RWE AG and E.ON AG, the country’s largest power companies, both climbed more than 4 percent on expectations Merkel’s Christian Democrats may extend the life of nuclear plants. Stada Arzneimittel AG gained the most since March following the defeat of the Social Democratic Party, which has led efforts to cap drug prices.

The DAX Index added 2.8 percent to 5,736.31, the steepest advance since Aug. 21. The measure has added 56 percent since March on speculation the worst of the global recession is past. The broader HDAX also increased 2.8 percent today, ending a three-day decline.

“A CDU/CSU/FDP government provides the greatest opportunities for equity-market-friendly reforms compared to other party combinations,” wrote Tammo Greetfeld, a senior strategist at UniCredit SpA in Munich. “The DAX uptrend will continue into 2010. The business cycle remains the key factor driving equity prices.” . . .

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