Third time lucky for Germany's Dax?

The last two times Germany's Dax surged over 8,000, the index quickly slumped. But this time it could be different.

Germany's benchmark Dax index (see chart) has surged ahead of its major European rivals over the past two years and has climbed through the 8,000 level for the third time. The last two times this happened, in 2000 and 2007, it promptly slumped. Will it have better luck this time?

Probably. Ludwig Donnert of Tao Capital, for one, sees scope for a rise to 8,700 by the end of the year. The firms that make up the Dax index are in excellent shape. In 2012, sales hit a record, while seven of the 30 firms in the index, including BMW, Henkel and Volkswagen, posted record earnings. German firms in the Dax, the midcap index MDax and the smaller TecDax are collectively paying out a record €34.4bn in dividends.

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