The German stock market experienced a significant surge on Wednesday, with the DAX index closing at 24,550 points, marking a 1.4% increase compared to the previous day’s close. Following a positive opening, the index reached a new all-time high of 24,609 points at 3:51 PM local time, before retracting slightly.
Market analyst Andreas Lipkow characterized the upward trend as a reflection of investor confidence, noting, “No negative news is good news right now and investors continue to purchase shares in German companies”. He cautioned, however, “The current situation can feel unsettling. Numerous potential risk factors remain unresolved, yet market participants appear to be overlooking these dangers.
Lipkow emphasized the precarious nature of the market, suggesting that a single, ill-considered social media post from a US leader could potentially destabilize European stock exchanges. “The stock markets are trading at ambitious valuations and are built on a very shaky foundation. However, each new price level compels hesitant investors to enter the market, thereby driving new record highs”. He added that this dynamic doesn’t accurately reflect the overall global economic situation.
Throughout the trading day, shares of Siemens, Deutsche Bank and Mercedes-Benz led the gains, while Sartorius shares lagged at the bottom of the leader board.
Energy prices saw modest increases. Gas futures for delivery in August rose slightly, with a megawatt-hour (MWh) costing 34 euros, implying consumer prices of at least 8 to 10 cents per kilowatt-hour (kWh) including taxes and fees should this level persist.
Crude oil prices also saw a minor rise, with a barrel of Brent North Sea crude fetching $70.25 at approximately 5:00 PM local time – a 10-cent or 0.1% increase compared to the previous day’s close.
The euro weakened slightly in afternoon trading, with one euro costing $1.1710, making a US dollar worth €0.8540.