The Dax started the trading day on Wednesday with significant gains. By 9:30 am, the leading index was calculated at around 21,272 points, resulting in a 1.1% increase from the previous day’s close. At the top of the stock list, the Adidas shares were leading, followed by Porsche and Porsche Automobil papers.
“Investors in Frankfurt are continuing to take on risk in the first hours of the new president’s term” commented Jochen Stanzl, Chief Market Analyst at CMC Markets. “This is also due to the fact that tariffs are not among the first measures, with the exception of those against Mexico and Canada, which will only take effect in eleven days. This suggests that Trump may still negotiate on this issue.”
This is in line with those who view the tariff issue primarily as a negotiating tactic, Stanzl said. “It could ultimately remain at the level of a threat to achieve certain results. However, one should not underestimate Donald Trump’s ability to impose tariffs if the negotiations do not go in the desired direction.”
In the Dax, investors are betting that this will also apply to Germany. “However, it may be premature to overlook Trump’s trade policy with too much optimism. As can be seen in the Chinese markets today, a single comment from Trump can cause the indices to fall” the analyst explained. “It is said there that Trump is still considering a 10% tariff on all Chinese goods. This may be less than initially feared, but it also shows that Trump is still keeping the issue on the agenda.”
Meanwhile, the European common currency was slightly weaker: One euro was worth around 1.0418 US dollars in the morning, and one dollar was worth around 0.9599 euros.
The oil price also fell: A barrel of North Sea Brent oil cost around 78.99 US dollars in the morning, which was 30 cents or 0.4% less than the previous day’s close.