On Wednesday the Dax fell sharply, trading at 23,640 points at Xetra’s close-down 1.4 % from the previous day’s settlement. After a weak opening it stayed in the negative territory with only small fluctuations.
“Investors remain nervous, financial markets volatile and safe‑haven assets in demand” said Andreas Lipkow, chief market analyst at CMC Markets. “The war in the Middle East now puts the global economic outlook in acute danger, prompting investors to rethink their previously mildly positive assessment of further economic development in the Eurozone”.
The analyst noted that the rising price of crude oil adversely affects inflation and overall economic performance across many sectors. “The impact is most obvious for airlines, which are suffering from markedly higher jet‑fuel prices” he explained. “This chain reaction extends to logistics, chemical manufacturing, and other sectors. The biggest problem remains uncertainty; thus, relief measures such as countries liquidating oil reserves tend to dissipate quickly, leaving prolonged energy supply disruptions in Europe unaddressed”.
Only a handful of Dax constituents closed in the green by the end of the session. The biggest gains came from Brenntag shares, while the bottom of the stand saw Vonovia and Rheinmetall. The defense company failed to meet investor expectations in its quarterly results.
Gas prices rose, too. A megawatt‑hour for delivery in April cost €49, up four percent on the previous day. If that level persists, the consumer price-including ancillary costs and taxes-would be at least about 9-12 cents per kilowatt‑hour.
Oil prices also surged. A barrel of Brent from the North Sea fetched $92.55 on Wednesday afternoon at 5 p.m. German time, 5.4 % above the previous trading day’s close.
The euro traded weaker on the afternoon of Wednesday. One euro was worth $1.1573, meaning one dollar could be exchanged for €0.8641.