FRANKFURT (dpa-AFX) - A major interest rate cut by the US Federal Reserve pushed the Dax above the 19,000-point mark for the first time on Thursday. At its peak, the leading German index reached a record high of just under 19,045 points. It ultimately ended the day 1.55 percent higher at 19,002.38 points. The MDax of mid-cap blue chips gained 1.84%, but at 26,265.94 points it is still a long way off its high of over 36,000 points from three years ago.

The previous evening, the Fed had heralded a turnaround in interest rates with the first rate cut in more than four years by 0.5 percentage points. "Fed Chairman Jerome Powell wants to limit the risk of a full-blown downturn with the XL rate cut, but at the same time does not want the move to be seen as a new pace for further easing of monetary policy," commented Konstantin Oldenburger, market analyst at CMC Markets. Quite a few investors had only expected a small rate cut of 0.25 points in advance.

"The Fed has started to take its foot off the brakes on the US economy as inflation slows and concerns about the growth outlook increase," wrote economist James McCann from asset manager abrdn Investments. If growth in the US does not pick up enough momentum, the Fed will "cut interest rates more sharply, reducing the risk of a hard landing", predicted analyst Eric Winograd from investment firm AllianceBernstein.

Fed Chairman Powell has already signaled further interest rate cuts by a total of 0.5 points by the end of the year. "In 2025, interest rates are set to fall by another full percentage point," wrote Jürgen Molnar, capital market strategist at RoboMarkets. If the US economy plays along with a soft landing, this would create "once again the best of all borrower's worlds"./niw/jha/