The DAX continued trending downwards on Monday, remaining in negative territory even after a sluggish start. Around 12:30 PM, the leading index was calculated at approximately 23,570 points, marking a 1.0 percent decline from the previous day’s closing level. The top-performing stocks included Rheinmetall, RWE, and Eon; while Continental, Deutsche Telekom, and Siemens Energy finished lower.
According to Andreas Lipkow, Chief Market Analyst at CMC Markets, the situation regarding Iran and the Strait of Hormuz remains precarious. Although an official ceasefire appears to be in place, this could change quickly should the announced US sea blockade targeting Iran materialize. “What we are seeing is a mutual probing to gauge how far each side is willing to go” he commented.
While market participants are monitoring this geopolitical development, their focus is increasingly shifting toward the start of earnings season. Today, investors are anticipating quarterly results from US investment bank Goldman Sachs, as outcomes from financial institutions will draw significant attention because they offer valuable insight into the state of the US economy. Specifically, analysts will scrutinize their profitability and the reserves allocated for potential market risks.
Meanwhile, energy prices remain a key factor influencing the DAX. Lipkow noted that “the German industry’s high reliance on oil exports will leave a drag on company balance sheets”. Coupled with this market environment, the announced warning strikes at Lufthansa are poorly received.
At midday on Monday, the common European currency strengthened somewhat: the Euro cost $1.1686, meaning the Dollar fetched 0.8557 Euros.
Oil prices also rose sharply. A barrel of Brent-grade North Sea crude cost around $102.50 near noon German time, an increase of 7.7 percent compared to the close of the previous trading day.