A German stock market index, the Dax, opened lower on Tuesday after reaching a new high of over 23,000 points on Monday. At 9:30 am, the index was calculated at around 22,760 points, a decline of 1.7 percent from the previous day’s close. Rheinmetall, Vonovia and Eon led the market, while Continental trailed behind, along with FMC and Daimler.
According to Thomas Altmann of QC Partners, the stock markets are driven by politics and the volatility is increasing as a result. “The markets are driven by politics like never before and with the dominance of political themes, the volatility is rising” he said. The expert attributed the market’s decline to the newly imposed US tariffs on Mexico, Canada and China, as well as the retaliatory measures from the affected countries. “That’s the trade war in full swing. Here comes a dangerous spiral of tariffs and counter-tariffs and the danger is great that in the end of the trade war, only losers will remain” Altmann stated.
Initially, the US indexes are being hit, Altmann said and the Dax has developed much better in the first two months of the year, almost 20 percent better than the Nasdaq 100. “That deserves a big exclamation mark even without further records” he added.
The European common currency, the euro, was slightly stronger in the morning, with one euro costing 1.0497 US dollars and one US dollar being worth 0.9527 euros. The oil price also decreased, with a barrel of Brent crude costing around 70.91 US dollars at 9 am German time, a decline of 71 cents or 1 percent from the previous day’s close.