The Dax index fell significantly on Thursday. At the Xetra trading close, the index was calculated at 22,999 points, a minus of 1.2 percent compared to the previous day’s close. After a negative start, the Dax built up its losses in the morning and then made up part of the losses, stabilizing in the end.
“European Central Bank President Christine Lagarde brought the market back down to earth with a hard reality of a widening trade war with the US today” commented Jochen Stanzl, Chief Market Analyst at CMC Markets. “The market was too busy with the German billion-euro question in the past few days to remember the tariffs. The impact this morning was correspondingly harsh.”
Stanzl described the half of a percentage point inflation jump Lagarde feared as “bitter”. Central banks had fought inflation for so long. “If growth shrinks and the price pressure increases, then a stagflation is coming, with less profit for companies, layoffs, consumer disappointment and corresponding stock market losses” he explained.
Until just before the close, the papers of Symrise were at the top of the stock list in Frankfurt. The Volkswagen shares were at the bottom.
Meanwhile, the gas price fell: a megawatt-hour of gas for delivery in April cost 43 euros, one percent less than the previous day. This implies a consumer price of at least nine to eleven cents per kilowatt-hour, including additional costs and taxes, if the price level remains the same.
The oil price, however, rose significantly: a barrel of North Sea Brent cost $71.81 at around 5 pm German time, a 1.5 percent increase from the close of the previous trading day.
The European common currency was weaker on Thursday afternoon: one euro cost $1.0848, a dollar was worth $0.9218 in euros.