The German stock market opened Tuesday with a positive trend, building on a strong start to the week. Around 9:30 am local time, the benchmark DAX index was calculated at approximately 23,900 points, representing a gain of 0.6 percent compared to the previous day’s closing level.
Most DAX-listed companies registered slight increases at the open of trading. Deutsche Post demonstrated the largest gain, followed by Infineon and Porsche. Counter to the prevailing trend, FMC, Continental and Commerzbank experienced minor declines.
Market analyst Thomas Altmann of QC Partners attributes the renewed rally to optimism surrounding potential trade negotiations between the United States and Switzerland. These hopes, coupled with evolving expectations regarding interest rates, are boosting market sentiment. “The probability of a Federal Reserve interest rate cut in September is now priced in at 93 percent, a significant rise from 43 percent prior to the release of last Friday’s employment report” Altmann stated.
Yesterday’s recovery also appeared to alleviate some market volatility. The VIX index, which gauges expected fluctuations in the S&P 500, registered its largest single-day increase since April on Friday, followed by its largest single-day decrease since April on Tuesday.
Looking ahead, Altmann emphasizes the importance of sustained investor participation. “The key question now is whether follow-up buyers will enter the market after yesterday’s bargain hunters”. He notes that a continued upward trajectory requires conviction and, importantly, a long-term investment perspective. Without such commitment, the recovery could be short-lived.
The Euro slightly weakened against the US dollar, trading at $1.1560, with the dollar fetching €0.8651.
Meanwhile, the price of Brent crude oil declined to $68.48 per barrel around 9:00 am local time, a decrease of 28 cents or 0.4 percent compared to the previous day’s closing price.
