DAX Index Records Gains as Market Optimism Prevails
The German DAX index closed at 24,036 points on Tuesday, a 0.4 percent increase from the previous day’s close. The index broke the 24,000 mark in the morning and maintained its upward momentum throughout the day.
Market analysts attribute the positive trend to a shift in investor sentiment, with pessimistic market participants seemingly throwing in the towel. “The German stock market is now moving from one record high to the next and the market breadth has also increased” said Andreas Lipkow, a market analyst. “Thirty-four out of the 40 DAX companies are contributing to the upward movement and it’s possible that the US downgrade is leading to an increase in demand for euro-nominated assets, including stocks.”
The US trade proposals have taken a backseat for now, with European financial markets showing little reaction to the developments, according to Lipkow. “It remains to be seen how long this phenomenon will last and how the trade dispute between the US and the EU will evolve. However, for now, the optimists are in control of the European financial markets.”
The top performers on the DAX index included FMC, RWE and BMW, while the bottom of the list was occupied by Zalando, Heidelberg Materials and Allianz.
Meanwhile, the gas price surged, with a megawatt-hour of gas for June delivery costing 37 euros, a five percent increase from the previous day. This implies a consumer price of at least eight to ten cents per kilowatt-hour, including additional costs and taxes, if the price level remains stable.
In contrast, the oil price fell, with a barrel of Brent crude costing 65.07 US dollars at 5 pm German time, a 47-cent or 0.7 percent decrease from the previous day’s close.
The euro was slightly stronger, with one euro exchanging for 1.1258 US dollars and one dollar for 0.8883 euros.