The German benchmark index, the DAX, continued to trade in the red until the midday. By about 12:30 p.m. local time it was at roughly 22,630 points, a decline of 1.4 percent from the previous day’s close. The top of the daily price list was occupied by Brenntag, BASF and Henkel, while the bottom three names were Porsche Holding, Siemens Energy and MTU.
Speaking on the market outlook, Andreas Lipkow, chief market analyst at CMC Markets, warned that “with each trading day that the oil price stays above USD 100, sentiment in the equities market deteriorates”. He added that the threat of stagflation is rising and could push Europe into a recession. According to Lipkow, the continent’s heavy reliance on energy “creates a painful sandwich situation, where both inflation and a looming slowdown in growth exert pressure on corporate balance sheets”. He claimed that this scenario is being amplified by contradictory developments in the Middle East, and that investors are increasingly pricing these risks into share prices.
On currency markets, the euro slipped slightly to 1 Euro = 1.1546 USD, which translates to 1 USD = 0.8661 Euro.
Meanwhile, the price of Brent crude oil spiked to about USD 106.20 per barrel around 12:00 p.m. German time, representing a 3.9 percent increase over the close of the previous trading day.