European markets experienced a modest positive start to the trading day Friday, with the DAX rising slightly to approximately 24,460 points – a gain of around 0.3 percent from the previous day’s closing level.
Leading gains were BMW, BASF and Brenntag, the latter boosted by a recent announcement of its intention to acquire assets from a U.S.-based pipeline specialist. Conversely, shares in Commerzbank and Rheinmetall saw declines. The downturn in Rheinmetall’s stock is potentially linked to recent internal leadership changes within the company and broader market sensitivity to anticipated discussions between U.S. President Donald Trump and Russian President Vladimir Putin regarding a potential ceasefire in Ukraine.
Market analyst Thomas Altmann of QC Partners highlighted the focus on the meeting in Alaska, noting that while equity markets have risen in anticipation, predictions for a swift resolution, as indicated by the Polymarket platform, remain low. Polymarket currently assesses the probability of a ceasefire before October at just 21 percent, rising to 66 percent within the next year.
Altmann also pointed to an upcoming options expiry, commenting that while August is typically a quiet period for options, this month could prove more significant due to the expiry of substantial hedging positions within the DAX. He noted the index is losing its four largest protective positions, representing 90,000 contracts – or 13 percent of all outstanding DAX puts – and a total loss of around 20 percent of its existing hedge positions.
Adding to global economic concerns, China’s property market continues to face challenges. Existing home prices in China have now fallen for 27 consecutive months, with new construction prices declining for a 26th consecutive month. This sector continues to cast a considerable shadow over the Chinese economy.
In currency markets, the Euro strengthened slightly Friday morning, trading at 1.1677 US dollars, while the US dollar was valued at 0.8564 Euros.