The Dax significantly declined on Tuesday. At the close of trading on Xetra, the index was calculated at 23,955 points, representing a 1.6% drop compared to the previous day’s close. Bayer, Scout24, and Qiagen led the performance, while Münchener Rück, Zalando, and Siemens Energy recorded losses.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that the sector rotation observable in the Dax over the past few trading days continued into the day, keeping the index largely above the 24,000 point threshold. However, the session ended lower than anticipated, as falling prices in New York prompted a dip below this key psychological barrier in the afternoon.
Market activity was characterized by investors seeking out stocks with positive corporate news, such as Bayer. Conversely, stocks that saw investors taking profits from prior weeks ended up declining. Lipkow stressed that the situation in the Middle East remains unresolved, leaving only the hope that other states will initiate further mediation efforts.
Attention was focused on German consumer prices and the ZEW index. While the inflation rate for April was as expected, the analyst reported that the economic outlook expectations of analysts came in at -10.2 points, which was slightly better than the prior expectation of -19.5 points. However, he cautioned that the survey must be contextualized, as it was conducted against the backdrop of expected ceasefires between the US and Iran.
Pertaining to the overall US economy, data released on Tuesday suggests not a sudden collapse, but rather a potential slow deterioration. Core consumer prices actually rose in April by 2.8%, a figure slightly stronger than the expected 2.7%, confirming that inflationary pressures are being maintained by the conflict in the Iran region.
In other markets, the European common currency was weaker at midday: one Euro cost 1.1731 US dollars, making the dollar available for 0.8524 Euros. Meanwhile, oil prices saw a sharp rise. A barrel of West Sea grade Brent traded at US$108.30 near 5 PM German time-a 4.0% increase over the closing price of the previous trading session.