The German stock market index, the DAX, opened on Friday morning almost unchanged. By 9:30 a.m. local time the main index was calculated at about 25,040 points, slightly below the previous day’s closing level. At the top of the price list were FMC, Airbus and Porsche Holding, while Bayer, Zalando and Infineon were last.
“The readiness for immediate profit‑taking after a single strong day indicates a high participation of short‑term traders” said Jochen Stanzl, chief market analyst at Consorsbank. He added that a potential U.S. attack on Iran makes an unsupervised rally in the DAX unlikely at the moment. “The rise in oil prices warns investors not to overexpose themselves to risk before the weekend”.
Stanzl noted that oil markets have begun to factor in the growing risk of a military confrontation between the U.S. and Iran. “It is not the actual Iranian oil production that is of concern, but rather the possibility of a blockade of the Strait of Hormuz” he said. The strait transports roughly 20 million barrels of oil per day, which represents just under one‑fifth of global demand, and is also the main route for LNG shipments to Europe.
The risk to European LNG supplies is especially worrisome when storage levels are already low. “Low gas reserves leave little room for additional strain. European gas prices could therefore be more sensitive than oil prices, whose global stocks are above average” Stanzl added.
In the foreign‑exchange market, the euro was slightly weaker on Friday morning: one euro was worth 1.1756 U.S. dollars, meaning the dollar traded at 0.8506 euros.
Meanwhile, oil prices slipped modestly. At 9:00 a.m. German time, a barrel of North Sea Brent cracked at 71.63 U.S. dollars – 3 cents, or 0.0 percent, lower than the previous day’s closing price.