The DAX index opened Thursday’s trading session with gains, reflecting a shift in market sentiment following recent Federal Reserve commentary. Around 9:30 am Central European Time, the benchmark index was calculated at approximately 23,625 points, representing a 1.1% increase compared to the previous day’s closing level.
Leading the gains were Siemens Energy, Sartorius and SAP, while Continental, BASF and Beiersdorf were among the underperformers. Continental’s position was notably impacted by the independent listing of its automotive division, now operating under the name Aumovio, which has resulted in a temporary inclusion of Aumovio within the DAX.
According to Jochen Stanzl, Chief Market Analyst at CMC Markets, the DAX’s upward movement is attributed to a reversal in currency markets following the Fed’s latest meeting. Stanzl noted that Jerome Powell’s remarks during the press conference indicated a more cautious approach to monetary policy than initially suggested in the released statement, emphasizing data-dependent decisions on a meeting-by-meeting basis. This has dampened expectations of a consistent path of interest rate cuts in the United States. The subsequent weakening of the Euro has spurred investor activity in German equities, with a perceived pain point for the Euro assessed to be around $1.19.
The DAX has yet to decisively breach the low point reached in August and some market participants are interpreting this as a potential “bear trap” signaling a false decline. However, there are presently no clear indicators of a sustained market bottom.
The Euro strengthened slightly Thursday morning, trading at $1.1819, with the dollar correspondingly valued at €0.8461.
Meanwhile, oil prices experienced a decline; Brent crude was trading at $67.68 per barrel, a decrease of 27 cents, or 0.4 percent, from the previous day’s closing price.