Thursday’s German market opened with a clear downside. By Xetra’s close, the DAX stood at 23,815 points, down 1.6 % from the previous day’s tally.
Shortly after Frankfurt’s trading kicked off, rumours that Iran might be open to dialogue over its nuclear programme pushed the index above 24,350 points. The optimism was short‑lived, however, as further military manoeuvres that day shifted sentiment back to caution. Analysts noted that, without a clear Iranian negotiator, it is difficult to imagine who would be able to engage the United States. The situation, therefore, remains tangled and is unlikely to ease before the weekend.
Throughout the day the DAX again slipped below the 24,000 mark. Investors worry that the conflict in the Middle East could flare suddenly, and the resulting speculation injects uncertainty into financial markets, driving shares lower. It is unclear whether European equities will recover soon or whether further selling pressure will persist. A key concern is the trajectory of oil prices. Should they rise further, investors are likely to retreat from European stocks, with the current focus being on oil’s trend dynamics rather than absolute levels.
Market participants fear a prolonged period of higher oil prices, which could reignite inflationary momentum. If inflation rises too sharply, the fragile European economic rebound could be wiped out before it truly takes off. In such circumstances, the European Central Bank would likely have little room to manoeuvre, as any rate cuts would only amplify inflation, according to analysts.
On Thursday afternoon, the euro weakened against the dollar, trading at 1.1569 US$ per euro, or 0.8644 euros per dollar. Gold fell as well; a fine ounce fetched US$5,067, a decline of 1.4 %, equivalent to €140.81 per gram. Meanwhile, Brent crude surged, with a barrel priced at US$84.84 (4.2 % above the previous day’s closing level) at 5 p.m. German time.