The DAX index gained ground on Wednesday, closing the Xetra session at 24,737 points, representing a 1.4% increase from the previous day’s close. After initially tracking at yesterday’s level, the index built momentum into positive territory before building on its gains significantly in the afternoon.
Market analyst Andreas Lipkow noted that the absence of negative news from the Middle East was currently a positive factor for the stock market. He suggested that investors view the relative calm surrounding the ongoing US-Iran conflict as a positive signal, prompting fresh investment. Furthermore, the index received extra support in the afternoon due to New York’s markets, where indices managed to recover initial losses from the first trading hours ahead of the evening Nvidia reports.
Lipkow stated that investors are betting on the continued rally in the semiconductor sector, provided that Nvidia’s figures are once again convincing. However, he cautioned that if the company fails to meet expectations, the stock market could quickly become volatile. He added that the current level of euphoria is very high and difficult to surpass. While demand for essential AI-capable semiconductors remains strong, competition is fierce, and future demand largely depends on the scaling and monetization effects of the various business models.
Regarding macroeconomic factors, Lipkow explained that investors reacted calmly to rising producer prices coming out of Germany, noting that bond yields had even fallen slightly. Despite this, the level of yields in Europe and the US remains a strain on equity markets. This trend reflects both the current inflation expectations and the corresponding rate measures by central banks, as well as a degree of skepticism about the high debts accumulated by affected economic regions and countries.
In terms of stock performance on the day, Infineon and MTU led the most traded stocks in Frankfurt, while BASF and SAP were the weakest performers.
In other market areas, commodity prices saw notable declines. The price of gas, for a million kilowatt-hours (MWh) delivered in June, cost 49 Euros, a drop of six percent from the day before. This suggests a consumer price of at least nine to twelve cents per kilowatt-hour (kWh), including ancillary costs and taxes, if the price level remains stable. The price of oil also fell sharply: a barrel of Brent crude oil cost $106.40 by midafternoon Wednesday, representing a decrease of 4.4% from the previous day’s close.
Finally, the Euro strengthened slightly by Wednesday afternoon. The exchange rate stood at 1.1631 US dollars per Euro, meaning one Dollar could be purchased for 0.8598 Euros.