The DAX index dropped significantly on Thursday, closing the trading day at 23,807 points, marking a decline of 1.1 percent compared to the previous day’s close. The index fell further into negative territory after initial losses.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that investors in Frankfurt remain highly sensitive to political and military events in the Middle East. He pointed out that technology stocks, specifically SAP and Infineon, were under selling pressure on Thursday, and automotive manufacturer shares were also among the biggest losers. While the gains from the previous day have not been entirely erased, the risk of further substantial price declines in the coming trading days remains evident.
According to Lipkow, both US labor market data and economic growth statistics disappointed expectations. He noted that the core PCE rate remained within expected parameters, offering no signs of accelerating inflation in the US. He added that these three key indicators will receive close attention from investors in the coming months. He emphasized that the conflict in Iran directly and indirectly impacts future developments in the US labor market and inflation trends. Subsequently, the US central bank will adjust its interest rate policy and act accordingly. Currently, the financial market anticipates a potential rate cut in the fourth quarter of this year.
Leading the stocks by price gains before the market closed were those of Brenntag and BASF, while SAP shares finished as the weakest performer.
In other market updates, the price of natural gas increased. A megawatt-hour (MWh) of gas for May delivery cost 46 Euros, a one percent rise from the previous day. If this price level remains stable, the consumer price would be at least around nine to eleven cents per kilowatt-hour (kWh), including ancillary costs and taxes.
Oil prices rose sharply; a barrel of North Sea Brent crude cost $99.11 on Thursday afternoon around 5 PM German time, representing a 4.6 percent increase over the previous day’s closing price.
Finally, the European common currency strengthened Thursday afternoon: the Euro was priced at $1.1698, meaning the dollar could be obtained for 0.8548 Euros.