The German stock market benchmark, the DAX, commenced trading on Wednesday with losses. Around 9:30 am local time, the index was calculated at approximately 23,520 points, representing a decrease of 0.4 percent compared to the previous day’s closing level. Leading the gains within the index were shares of Rheinmetall, Deutsche Telekom and MTU, while Deutsche Bank, Adidas and Brenntag experienced declines.
“The engine room of the DAX appears to be faltering” commented Jochen Stanzl, Chief Market Analyst at CMC Markets. He described attempts at rallies as fleeting and noted a lack of buying interest, leading to increasingly constrained trading patterns. “The German benchmark has lacked a clear direction for four consecutive weeks.
Shifting policy from the U.S. President regarding Ukraine is currently influencing the performance of defense stocks. Early trading in Asian markets has already seen some of these shares reach record highs. The increase in geopolitical tensions and the ongoing efforts by the U.S. and Europe to encourage India and China to reduce their purchases of Russian oil, are also impacting the oil price. While Russia is expected to face increased challenges in selling its oil, alternative buyers will likely emerge. According to Stanzl, “Russia produces nearly as much oil as Saudi Arabia; a complete shutdown would trigger a catastrophe in the oil price.
The euro weakened slightly Wednesday morning, trading at $1.1788, or €0.8483 per dollar.
Crude oil prices also saw a slight upward trend. Brent crude, a benchmark grade from the North Sea, was trading at $67.76 per barrel around 9:00 am local time, a rise of 13 cents, or 0.2 percent, compared to the closing price of the previous trading day.