The German stock index, Dax, opened the trading day on Thursday with modest gains. Around 9:30 AM, the leading index was calculated at approximately 24,100 points, marking a 0.1 percent increase from the previous day’s closing level. BASF, SAP, and Infineon topped the list of top gainers, while Deutsche Telekom, Daimler Truck, and Qiagen finished with the strongest gains.
According to Jochen Stanzl, Chief Market Analyst at Consorsbank, while the Dax is showing some hesitation, growing optimism related to the Israeli-Iranian conflict is allowing global stocks to reach new record highs. He noted that this reflects a typical pattern in stock market psychology, which has shifted from extreme fear to a neutral stance, and now to-currently-greed. This constantly raises the bar for investors, leading many to buy now while reserving the right to question their decisions later, though Stanzl predicted that the moment for those questions will eventually arrive. He added that impatience over progress in negotiations between Iran and the US will increase if results are not forthcoming.
Stanzl suggested that investors anticipate a swift return to the status quo. He pointed out that with China’s GDP growing by five percent, the economy is set to face robust conditions in the current quarter, building on a dynamic start into the new year. Investors might draw the hope that China’s economic data could serve as a model for the upcoming reporting season, and that the Israeli-Iranian conflict will ultimately prove to be only a temporary downturn in growth. Furthermore, expectations regarding interest rates are changing. Investors are moving away from the assumption that the ECB will raise rates. Although oil prices are expected to remain high for the foreseeable future, the specter of inflation is slowly but surely receding from the market.
The European common currency was slightly weaker on Thursday morning: the euro cost $1.1797, meaning the dollar was available for 0.8477 euros. Meanwhile, oil prices rose; a barrel of North Sea Brent crude cost $95.50 around 9 o’clock German time, an increase of 57 cents, or 0.6 percent, compared to the close of the previous trading day.