The German DAX index experienced a slight decline on Thursday, closing at 24,119 points – a marginal drop from the previous day’s close. Following a brief morning rally, the index dipped below the previous day’s level, briefly recovered and subsequently traded sideways just beneath that mark. This muted performance reflects a broader trend of profit-taking amongst investors, fueled by increasingly hawkish signals emanating from central banks.
Market analyst Andreas Lipkow attributed the DAX’s wavering to a “profit-taking mode” among participants. “The increasingly restrictive monetary policy outlook is removing a crucial fuel source for financial markets” Lipkow explained. “This is currently acting as a brake and causing stock market valuations to appear different. This aspect plays a particularly important role in the United States”. The observation highlights a growing concern that US economic policy and its potential impact on global markets, is increasingly influencing the performance of the DAX.
This dependence on US financial performance is drawing increasing scrutiny. Lipkow emphasized the growing need for improved economic momentum within Germany itself. “Otherwise, this reliance on US financial markets could prove detrimental to the DAX”. The comment subtly critiques the fragility of the German economy’s independence and its vulnerability to external forces, raising questions about the long-term sustainability of the DAX’s performance.
Among individual stocks, Scout24 led the performance list until shortly before market close, while Porsche, Deutsche Telekom, Merck and Bayer lagged.
Meanwhile, gas prices offered a contrasting trend, declining to €31 per megawatt-hour for November delivery, representing a 3% decrease from the previous day. This implies a consumer price of at least 8-9 cents per kilowatt-hour including ancillary costs and taxes, if the price level remains consistent, potentially easing some pressure on household budgets. However, the ongoing volatility in energy markets remains a significant geopolitical and economic challenge.
Despite the gas price decline, the price of Brent crude oil edged up slightly, reaching $65.02 per barrel, a modest increase of 0.2%. The euro also weakened, trading at $1.1562, highlighting persistent concerns over the currency’s stability in a shifting economic landscape. The fluctuating exchange rate and energy prices further underscore the complex interplay of factors influencing the German economy and the DAX’s performance.