FRANKFURT (dpa-AFX) - The rapprochement in the customs dispute between the EU and China gave the Dax some momentum again on Monday. The leading German index closed 0.89 percent firmer at 18,325.58 points, mainly thanks to the popular car stocks. Despite the profit-taking on Friday, it had recovered somewhat last week and built up a buffer to the 100-day moving average. This is an important technical indicator for the longer-term trend. The MDax of medium-sized companies ultimately rose by as much as 1.61% to 25,703.64 points on Monday.

Analyst Konstantin Oldenburger from the broker CMC Markets commented that the fact that the Dax overcame the high from the previous week right at the start had strengthened the foundations of its recovery. The 18,000-point mark, which is now a good 300 points behind the index, "is now acting as massive support and is becoming a point of reference for investors who are still undecided". In addition, according to Landesbank Helaba, the weak German Ifo index has forced the expectation of further interest rate cuts by the European Central Bank (ECB).

The sword of Damocles of the upcoming parliamentary elections in France, which continues to hover over the markets, was unable to affect share prices, at least at the start of the week. This was also the case in Europe: the EuroStoxx 50, the leading index for the eurozone, and the Dax ended the week almost 0.9 percent higher. Paris and London also saw an upward trend. New York's leading index, the Dow Jones Industrial, was up almost one percent at the close of European trading, while the technology-heavy Nasdaq 100 fell by 0.3 percent.

In the DAX, shares in car manufacturers benefited from the fact that China and the EU want to negotiate with each other in the dispute over e-car tariffs. Even if the chances of an agreement are viewed critically, the announced talks were initially enough to give investors some relief. Shares in BMW, Porsche AG, Volkswagen and Mercedes-Benz rose by up to 2.7 per cent.

Index leader Covestro ended the day up 5.1 percent at EUR 53.86 after temporarily posting higher gains. Based on the prospect of an offer price of EUR 62 per share, the plastics group confirmed that concrete negotiations with the state-owned oil company Adnoc from the United Arab Emirates had begun. However, at 55 euros, the top price still remained some distance away from the possible offer.

Siemens Energy shares were another DAX mainstay, rising by 4 percent. Saudi Arabia commissioned the energy technology group with the construction of power plants worth billions.

The biggest winner in the second-line index SDax were the recently battered shares of Deutz: they jumped by a good 20 percent thanks to investors' fantasy that the engine manufacturer could enter the booming defense business. The company is considering supplying engines for wheeled armaments vehicles, wrote the newspaper "Welt am Sonntag" after a conversation with CEO Sebastian Schulte.

The euro found its way up again and most recently cost 1.0725 US dollars. The ECB had previously set the reference rate at 1.0730 (Friday: 1.0688) dollars.

On the bond market, the current yield rose from 2.42 percent on Friday to 2.46 percent. The bond index Rex fell by 0.13 percent to 125.05 points. The Bund future fell by 0.20 percent to 132.34 points./gl/he

--- By Gerold Lohle, dpa-AFX ---