The German stock market, as measured by the Dax, started the trading day on a positive note on Thursday morning. By 9:30 am, the index had reached around 23,630 points, a 0.6 percent increase from the previous day’s close. Sartorius, Henkel and Merck led the pack, while SAP, Mercedes-Benz and BASF lagged behind.
Market analyst Jochen Stanzl of CMC Markets attributed the optimism to the “ceasefire” between Iran and Israel, which had already led to a forgetfulness of yesterday’s gains. “The calm in the geopolitical situation now brings out the bargain hunters” he said, adding that the mood in Germany was also shifting, as evident in the sector rotation within the stock market.
Stanzl pointed out that the interest in growth stocks was increasing, with investors showing a preference for companies that are likely to benefit from the early stages of a growth spurt. This was reflected in the stabilization of mid-cap stocks, semiconductors and the continuation of the rally in the banking sector.
The appetite for growth stocks was also visible in New York, according to Stanzl, as investors anticipated a potential further reduction in interest rates by the Federal Reserve, following the expected nomination of a new Fed chief by US President Donald Trump. “The early nomination is unusual and could create a kind of shadow chairman of the central bank, who would already influence monetary policy expectations before Powell’s departure” he said.
Meanwhile, the euro was stronger, trading at 1.1694 US dollars per euro, with the dollar equivalent to 0.8551 euros. The Brent oil price also rose, with a barrel trading at 68.21 US dollars, a 0.8 percent increase from the previous day’s close.