The German DAX index experienced a modest gain on Wednesday, closing at 24,050 points – a 0.4% increase from the previous day’s close. While the morning session commenced with caution following Wall Street jitters, the index rebounded strongly in the afternoon, spurred by a recovery in US markets and bolstered by purchases of auto stocks following BMW’s latest figures.
Christine Romar, Head of Europe at CMC Markets, observed a hesitancy amongst investors early in the day. “There was a point where it looked like bargain hunters were reluctant to re-enter the DAX below 24,000 points due to emerging nervousness on Wall Street” she stated. However, the afternoon rally, driven by a rebound in New York and strategic buying of auto sector equities, decisively overcame this resistance.
BMW’s results, while broadly meeting expectations, proved sufficient to elicit optimism within a struggling industry. Romar highlighted the marginal positive surprise in margins, mirroring a previous boost seen with Mercedes-Benz. “Investors in a crisis-ridden industry are already satisfied with such results” she commented.
However, underlying vulnerabilities remain a significant concern. The continued struggle against cheaper competition in China presents a persistent challenge for German automakers. This pressure necessitates a radical shift in strategy rather than simply reacting to immediate market fluctuations. The reliance on a global market increasingly dominated by alternative manufacturing hubs underscores a broader strategic vulnerability within the German industrial sector.
Across the top performers, BMW, Mercedes-Benz and Daimler Truck led the gains, while Siemens Healthineers lagged behind.
Beyond the stock market, the price of natural gas continued its downward trend, reaching €32 per megawatt-hour for December delivery – a 2% decrease from the previous day. This translates to a consumer price of at least 8-9 cents per kilowatt-hour if the current trend persists, offering some relief for households, but signaling potentially weakening demand and further complicating the energy transition roadmap.
Crude oil prices also edged lower, with Brent North Sea crude falling to $64.34 per barrel, a decline attributed to broader market anxieties. The euro weakened slightly to $1.1478, reflecting underlying pressures on the currency and potentially foreshadowing further volatility.