The Dax Index started the trading day on Thursday with modest gains. By 9:30 am, the benchmark was calculated at around 20,296 points, a 0.2 percent increase from the previous day’s close. Siemens Energy’s shares led the pack, while Heidelberg Materials and Porsche’s shares lagged behind.
“The upcoming earnings season will remain the strongest driver of the Dax” commented Jochen Stanzl, chief market analyst at CMC Markets. “Investors are betting that the financial reports of many companies will be good enough to keep the rally going.” The US business of German companies, in particular, could positively influence the earnings season, Stanzl said, citing the prospect of a renewed growth acceleration due to the pro-business policies of Donald Trump. “A strong economy in the US and a weak euro here should improve the overall financial reports.”
However, the Dax has already risen significantly, and expectations are high. “And if the bar is already so high, it will be harder for companies to clear it” the analyst explained. “Already, a trend is emerging: companies that meet expectations will only be rewarded with under-average price increases, while those that disappoint will be punished twice as harshly.”
The European common currency was slightly weaker on Thursday morning, with one euro costing 1.0399 US dollars, and one dollar being worth 0.9616 euros.
Oil prices also fell slightly, with a barrel of North Sea Brent crude costing around 78.96 US dollars at 9 am German time, a 4-cent or 0.1 percent decrease from the previous day’s close.