The DAX saw slight losses at the start of the week. At the close of trading on Xetra, the index was calculated at 23,742 points, marking a drop of 0.3 percent compared to the previous trading day.
Shares of Deutsche Telekom were particularly under pressure. The US bank JP Morgan recently lowered its price target for the telecommunications company’s stock, though it maintained a rating of “Overweight”. The bank appeared particularly pessimistic regarding the US business segment.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that the DAX recovered somewhat towards the previous day’s level in the afternoon, tracking the rebound of Wall Street from pre-market losses. However, the situation in Iran and the Strait of Hormuz remains problematic. Although the ceasefire seems to hold following the breakdown of talks, this could change quickly if the US proceeds with the announced sea blockade, potentially leading to armed confrontations. Currently, a process of mutual probing is underway to gauge how far each party is willing to go.
While investors are observing this situation, their focus remains on the reporting season that began on Monday with Goldman Sachs’ figures. The fallout from the Middle East conflict is evident not only in rising crude oil prices and high volatility but also in widespread corporate reluctance to finance expansions or acquisitions.
Lipkow pointed out that while the earnings reports provide good insight into the state of the US economy, the banking and insurance values on the DAX were dragged down by the figures.
He also highlighted that energy prices remain a primary concern for the DAX. He stated that the German industry’s significant reliance on oil exports will leave drag marks on corporate balance sheets, a situation that is not conducive to the announced warning strikes at Lufthansa.
In currency markets, the Euro strengthened on Monday afternoon, with one Euro exchanging for 1.1710 US dollars, and consequently, one dollar buying for 0.8540 Euros.
Gold prices weakened, falling to $4,712 per fine ounce in the afternoon, which represents a 0.8 percent decrease. This translates to a price of 129.37 Euros per gram. However, oil prices increased sharply. A barrel of North Sea Brent crude cost $101.90 on Monday afternoon around 5 PM German time, marking a 7.0 percent increase from the close of the previous trading day.