The German index, the Dax, fell into negative territory on Friday afternoon after a reserved start to trading. At around 9:30 AM, the leading index was calculated at approximately 24,080 points, representing a 0.3 percent drop compared to the previous closing level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that “the Dax continues to struggle with the 24,000 point mark”. He observed that shares from the major company SAP were providing some support in the struggle to maintain this psychologically important level. However, he pointed out that overall nervousness was increasing ahead of the weekend, leading investors to withdraw risk from their portfolios. Furthermore, rising oil prices were adding pressure, as concerns about future inflation were becoming more pronounced.
Lipkow added that this risk-averse trading behavior was drawing attention to shares in SAP, Siemens Energy, Deutsche Börse, and Deutsche Telekom. Conversely, traditional cyclical stocks were less favored, although BASF was an exception. The prospect of a strong increase in demand for petrochemicals due to production outages made the shares of the largest European chemical group interesting, though it remains uncertain whether the impact of higher selling prices or the negative effect of purchasing costs will prevail.
Looking at broader economic indicators, fundamental price increases were visible in German producer prices, which rose by 2.5 percent in March, exceeding the expected increase of only 1.4 percent. This situation is likely to affect the European Central Bank’s interest rate policy in the medium term and continue to put downward pressure on bond market yields.
Regarding the overall market situation, Lipkow stated that it remains difficult to predict and could deteriorate or stabilize in an instant. He concluded that it is “not an easy position for investors and is unique in its current manifestation”.
In commodity and currency movements, the Euro gained strength on Friday afternoon, trading at 1.1689 US dollars, which meant the dollar could be purchased for 0.8555 euros. Gold prices weakened, with a fine ounce selling at $4,682 in the afternoon, representing a 0.3 percent decline. Concurrently, oil prices rose sharply; a barrel of Brent crude oil traded around $107.20 by noon German time on Friday afternoon, which was a 2.1 percent increase from the previous day’s close.