The German stock market indices saw a notable decline toward the end of the week. At the closing of Xetra trading, the Dax concluded at 24,339 points, marking a 1.3% loss compared to the previous day’s close. After a weak start, the index remained negative, with losses expanding throughout the afternoon session.
Market analyst Andreas Lipkow suggested that the Dax has not been able to recover its lost ground following its mid-week surge above the 25,000 point mark, despite the ongoing rally in New York. He commented that all the week’s gains had been wiped out. According to Lipkow, the Dax must contend with persistently high oil prices, which undermine Eurozone economic expectations, and consequently, those for Germany.
The analyst warned that the tougher period could still lie ahead, creating negative pressure on companies from two sides: increasing operational costs, coupled with expected consumer spending cuts due to high energy and food prices. Consequently, Lipkow stated that investments in German stocks are currently a gamble based on whether and how this challenging scenario will develop.
During the trading day, Infineon shares topped the list of gains, while Rheinmetall and Allianz finished in the red.
On the commodity front, the price of Brent crude oil climbed significantly. On Friday afternoon, a barrel of North Sea Brent cost $101.90, representing a 1.8% increase from the previous day’s closing prices. Gas prices also rose; a megawatt-hour (MWh) of gas for June delivery cost 44 Euros, an increase of one percent from the previous day. If this price level remains stable, the implied consumer cost would be at least around nine to eleven cents per kilowatt-hour (kWh), including ancillary costs and taxes.
In currency movements, the Euro remained somewhat stronger on Friday afternoon, quoting at $1.1764, which meant that the dollar could be bought for 0.8501 Euros.