The expectation of an interest rate cut by the European Central Bank (ECB) is causing price gains in the Dax.

After opening on Thursday, the leading German index was a good half a percent firmer at 18,683 points. Market participants are assuming that the monetary authorities headed by ECB chief Christine Lagarde will cut interest rates by 0.25 percentage points when they make their decision at 2.15 pm (CEST). This would reduce the key deposit rate on the financial market to 3.75 percent.

Analysts urged caution. "Today's interest rate cut has long since been priced into share and bond market prices," said Thomas Altmann, portfolio manager at asset manager QC Partners. "Therefore, today's interest rate cut will not lead to another leap of joy on the stock markets. The only decisive factor for the stock markets is the outlook." At the moment, investors are expecting a second rate cut in September. There is currently a 50 percent chance of a third cut in December.

Among the individual stocks, SAP shares were in demand, rising by 3.4 percent. This was due to positive statements by Group CEO Christian Klein on the ongoing restructuring of the Walldorf-based software company. Investors also stocked up on Fresenius. The shares of the healthcare group advanced by almost two percent following a positive commentary by the major London bank Barclays.

(Report by Zuzanna Szymanska, edited by Kerstin Dörr. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)