Financial Markets Experience Volatility Amid Geopolitical Tensions
The German Dax index closed at 23,435 points on Tuesday, a decline of 1.1 percent from the previous day’s close. The index opened weakly and remained largely flat in the negative throughout the day, according to market analysts.
The current cautious attitude among investors is not a sign of panic, but rather a desire for more facts and clarity, said Andreas Lipkow, a market analyst. The ongoing situation in the Middle East has a significant potential to negatively impact the global economy and the nervousness is reflected in the oil prices, he added.
The ZEW economic index, which measures investor sentiment, has shown a slight improvement, but this does not necessarily translate to a change in the overall market sentiment, Lipkow emphasized. The conflict in Iran is a game-changer and it can quickly lead to higher volatility in the markets.
Meanwhile, the gas price has risen, with a megawatt-hour of gas for delivery in July costing 39 euros, a four percent increase from the previous day. This would imply a consumer price of at least eight to ten cents per kilowatt-hour, including additional costs and taxes, if the price remains stable.
Oil prices also surged, with a barrel of Brent crude costing 75.29 US dollars at around 5 pm German time, a 2.8 percent increase from the previous day’s close.
The European common currency, the euro, was weaker against the US dollar, with one euro costing 1.1534 US dollars and one US dollar being worth 0.8670 euros at the time of the report.