The German stock index opened the trading day on Thursday in the red. By 9:30 a.m. the DAX was quoted at about 23,535 points, representing a decline of roughly 0.4 percent from the previous closing level. At the top of the daily price list were Zalando, Rheinmetall and Hannover Rück, while BMW, Bayer and Continental trailed at the bottom.
Brent crude continued to climb, trading around US$ 95.68 per barrel at about 9 a.m. German time-a rise of about 4 percent compared with the previous day’s close.
Thomas Altmann of QC Partners warned that worries over the Strait of Hormuz are getting more intense. “The longer the Strait remains impassable, the bigger the economic fallout and the more the world is dragged into the conflict” he said. He also noted that the recent jump in oil prices signals that most market participants believe that releasing part of the Strategic Oil Reserve will not be enough to sustainably curb the price surge. “If high oil prices keep inflation sustainably high, the economy will bear an additional burden” Altmann added. “Markets already price in at least one rate hike by the ECB, and there is a 60 percent probability of a second move. Higher rates would then be the second drag on growth”.
An analyst pointed out that investor uncertainty in Germany is high, illustrated by the revenue figures. Yesterday’s DAX‑company sales hit a new annual low, almost half below the usual average. “The biggest fear among investors today seems to be making wrong investment decisions” the analyst said.