On Thursday, the Dax index had a significant boost. By the Xetra closing, the index was calculated at 22,612 points, a 2.1 percent increase compared to the previous day’s close. After a already friendly start, the Dax continued to build on its gains and reached a new all-time high of around 22,625 points by 5:24 pm.
Among the top performers were the stocks of Siemens, Volkswagen and BMW, while Deutsche Telekom was the laggard.
“At the very least, it is clear after the stronger-than-expected producer prices in the US in January that the stock market is only peripherally aware of the inflation theme at the moment” commented Konstantin Oldenburger, a market analyst at CMC Markets. “Investors are more interested in the question of whether the new US President, Donald Trump, will continue to pursue possible budget cuts with the energy and determination needed to reduce the US debt on a medium to long-term basis. The US Federal Reserve will also contribute to this by lowering interest rates over the short or long term, as the interest burden with bond yields of and above five percent cannot be sustained in the long run, according to Oldenburger.”
“In this environment, a shift in favor could take place on the stock exchanges. The strong performance of the Dax in recent weeks and months also points in this direction. While SAP, with its significant weight, is currently playing the most important role in the rally, the comeback of Volkswagen, BMW, BASF and Thyssenkrupp is very positive to see” the analyst added. “It could be interesting in the coming months if SAP were to go into a correction and the old economy were to continue its recovery.”
Meanwhile, the gas price fell: a megawatt-hour (MWh) of gas for delivery in March cost 51 euros, seven percent less than the previous day. This implies a consumer price of at least around 10 to 12 cents per kilowatt-hour (kWh) including additional costs and taxes, if the price level were to remain so permanently.
The oil price also fell: a barrel of the North Sea Brent type cost 74.95 US dollars by 5 pm German time, 23 cents or 0.3 percent less than the previous day’s close.
The European common currency was stronger on Thursday: one euro cost 1.0444 US dollars and a dollar was worth 0.9575 euros.