On Wednesday, the Dax index saw a significant decline, closing at 22,434 points, a 1.8% drop from the previous day’s close. After a positive start and a new all-time high at 9:41 am at 22,935 points, the Dax turned negative and continued to build on its losses.
“This is the first time in 12 trading days that the Dax has fallen after a record high in the day’s trading, indicating that the rally may at least pause for the time being” commented Konstantin Oldenburger, market analyst at CMC Markets. “Investors may have initially ignored the recent tariffs on imported cars to the US, but by mid-day, they may have realized that the upcoming German federal election on Sunday could bring a government that is more business-friendly.”
From a technical perspective, a pause in the market could be beneficial, leading to a potential decline to around 21,800 points, according to Oldenburger. “This would allow some of the overbought conditions to unwind and the Dax could have a chance to evaluate the new government, if one is formed and potentially continue the rally later on.” However, the analyst also fears that the uncertainty until then could negatively impact the short-term price development.
Only a few stocks were in the green in Frankfurt, including those of E-On, Rheinmetall and Infineon, while Heidelberg Materials was the laggard.
Meanwhile, the gas price fell, with one megawatt-hour of gas for delivery in March costing 48 euros, a 3% decrease from the previous day. This implies a consumer price of at least nine to eleven cents per kilowatt-hour, including additional costs and taxes, if the price level remains stable.
The oil price, however, rose, with a barrel of North Sea Brent crude costing 76.32 US dollars at 5 pm CET, a 48-cent or 0.6% increase from the previous day’s close.
The European common currency was weaker, with one euro costing 1.0410 US dollars and one US dollar being worth 0.9606 euros.