40 pm, representing a 0.3% gain compared to the previous trading day. Sartorius, Rheinmetall, and SAP led the index, followed by Deutsche Bank, Eon, and FMC.
The news of the annual inflation in the euro area rising further did not trigger significant negative movements in the stock market. However, “these are unpleasant news for the ECB” said Thomas Gitzel, Chief Economist of the VP-Bank Group, “the currency area is lagging, and interest rates should be lowered, but the inflation development speaks a different language. It was to be expected that the inflation rate would rise at the end of 2024, but the price index is still climbing higher.”
“The service sector prices are once again a cause for concern” he added, “service sector prices in the common currency area rose by 4% compared to the previous year. In the previous month, it was still 3.9%.” The already published German consumer prices suggested a stronger increase in service sector prices.
“The weak economic development may weigh more heavily on the ECB than the inflation increase” the economist said, “and that’s why the European central bankers will likely lower the key interest rates by 25 basis points on January 30, even if this initially doesn’t feel good in light of the price increase.”
The European common currency was stronger on Tuesday morning: one euro cost 1.0413 US dollars, and one dollar was worth 0.9603 euros.
Meanwhile, the oil price rose: a barrel of the North Sea’s Brent crude cost around 76.88 US dollars at 12 pm German time, representing a gain of 58 cents or 0.8% compared to the end of the previous trading day.