The market started the week with a downturn, as the Dax index finished Wednesday at 23,955 points, marking a decline of 0.3 per cent from Tuesday’s close. After an initially positive start, the index quickly turned negative and consistently traded below the previous day’s closing level.
Adding to the cautious sentiment, Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that achieving a major stabilization of the index above the 24,000 mark was unlikely that day. He described the current economic atmosphere as ambivalent. While the ongoing conflict in the Middle East continues to pressure global energy prices, inflation, and central bank policies, positive corporate data points can occasionally defy generally gloomy economic forecasts. He suggested that the Dax capitalized on this mixed environment to consolidate its position.
Looking ahead, investors expressed concern over increasingly high crude oil prices and awaited the reaction of the US Federal Reserve. Regarding local inflation, Lipkow pointed out that German consumer price indices were in line with expectations, rising 2.9 per cent year-on-year and 0.5 per cent month-on-month. He noted these figures indicated no rapidly accelerating inflationary trends in Germany, though other European nations had shown some signs of this acceleration.
He cautioned that central bankers, both in Europe and across the Atlantic, face a complex task: they must accurately assess the stability of economies in affected regions and predict the negative impact of the Middle East conflict on consumer spending and prices. Lipkow added that this is no easy job, warning that both overreacting and waiting too long could lead to negative consequences, thereby limiting the overall maneuverability of monetary authorities.
In Frankfurt’s listing, the shares of Adidas, Scout 24, Infineon, and Airbus led the list just before the close, while the names of Siemens Healthineers and the reinsurance companies Munich Re and Hannover Re featured at the end of the index.
Commodity markets saw significant movement. The price of gas rose sharply to 47 Euros per MWh for delivery in May, representing an eight per cent increase from the previous day. This suggests a minimum consumer cost of between nine and eleven cents per kilowatt-hour, inclusive of taxes and auxiliary charges, should the price level persist.
Oil prices also rose sharply. A barrel of Brent crude oil reached $117.60 on Wednesday afternoon, marking a 5.7 per cent jump from the closing price of the previous trading day.
In currency terms, the Euro was slightly weaker on Wednesday afternoon. The exchange rate moved to 1 Euro equaling $1.1696, meaning that the dollar was available for 0.8550 Euros.