The German stock market opened Tuesday with modest gains, continuing a positive start to the trading week. Around 9:30 am, the leading DAX index was calculated at approximately 23,900 points, representing a 0.6 percent increase from the previous day’s closing level.
Most DAX-listed companies exhibited slight upward movement at the market’s opening. Deutsche Post recorded the largest increase, followed by Infineon and Porsche. However, defying the prevailing trend, FMC, Continental and Commerzbank experienced declines.
“Hopes for a trade agreement between the United States and Switzerland are fueling a renewed rally in the stock market” stated market analyst Thomas Altmann of QC Partners. He added that evolving expectations regarding interest rates are also providing a positive impetus. “The market now places a 93 percent probability of a Federal Reserve interest rate cut in September, a significant jump from 43 percent prior to the release of last Friday’s jobs report.
The previous day’s recovery also seemed to diminish expectations of volatility. This is reflected in volatility indices, which experienced both a substantial rise and subsequent fall. “The VIX, which measures anticipated fluctuations in the S&P 500, saw its largest daily increase since April on Friday. Yesterday witnessed its largest daily decrease since April.
Altmann further emphasized that the key factor for the markets moving forward will be whether the initial buying pressure from bargain-hunters is followed by sustained investor participation. “For a further increase to be sustained, conviction and, above all, a long-term investment perspective are necessary. Without that, the recovery could quickly stall.
The Euro was slightly weaker on Tuesday morning, trading at $1.1560, with the dollar fetching €0.8651.
Meanwhile, oil prices declined; Brent crude was trading at $68.48 per barrel around 9 am German time, a decrease of 28 cents, or 0.4 percent, compared to the previous day’s closing price.