The DAX index climbed significantly on Thursday, closing at 24,292 points, marking a 1.4 percent increase compared to the previous day’s close. After a sluggish start on Wednesday, the index managed to swing into positive territory and build on its gains throughout the trading day.
Market analysts attributed the general lift in mood to the positive trading open seen in New York. Furthermore, the decline in oil price notations and an unexpected support for the Japanese Yen-against both the US Dollar and the Euro-were noted, with rumors circulating about potential interventions by the Bank of Japan.
According to CMC Markets chief market analyst Andreas Lipkow, these factors led to broader positive sentiment across European equity markets. Macroeconomic data from Europe mostly met expectations. While the European Central Bank’s (ECB) decision to keep key interest rates unchanged was not surprising, the analyst highlighted that the ECB adopted a tone regarding inflation expectations similar to that of the US Federal Reserve. However, the ECB remains cautious, noting that the European economy faces greater risks due to the situation in the Middle East. Although the short-term inflation outlook was adjusted upward, the ECB signaled no intention of modifying its interest rate path in the medium term, a position welcomed by investors.
In contrast, US data appeared relatively mixed. While initial applications for unemployment benefits came in at 189,000-below the expected 213,000-indicating a persistently strong job market, other indicators were less encouraging. The PCE price index stood at 4.3 percent, exceeding the anticipated four percent, and the US economic growth for the first quarter came in at just 2 percent, below the expected 2.3 percent. Overall, the analyst cautioned that this mixed development does not yet represent a clear trend, but rather raises concerns about a potential stagflation scenario in the US.
In Frankfurt, Deutsche Post shares were the top performer near the close, followed by Brenntag and Bayer. Munich Rück’s shares recorded the day’s lowest performance.
In the commodities sector, the natural gas price fell to 46 Euros per megawatt-hour (MWh) delivered in May, a reduction of two percent from the previous day. Should this price level hold permanently, it implies a consumer cost of at least nine to eleven cents per kilowatt-hour (kWh), including ancillary costs and taxes.
Oil prices dropped sharply as well. On Thursday afternoon, a barrel of Brent crude priced in the North Sea was valued at $114.40, representing a 3.1 percent decrease of 365 cents from the close of the previous trading day.
Finally, the European community currency strengthened on Thursday afternoon, trading at $1.1728 per Euro, meaning the US Dollar was available for 0.8527 Euros.