German stock market’s DAX index experienced modest gains at the opening of trading Wednesday. Around 9:30 AM local time, the index was calculated at 24,205 points, representing a 0.8 percent increase compared to the previous day’s closing value. Leading performers included Rheinmetall, SAP and Zalando, while Siemens Energy, Porsche and Commerzbank were among the stocks registering losses.
Market expert Thomas Altmann of QC Partners noted the DAX remains within striking distance of a record high. He highlighted Friday as a potentially significant date, coinciding with the expiration of four substantial put option positions currently serving as downside protection. “If these are not extended, the DAX will lose another portion of its safety net. These top four positions alone currently account for 13 percent of the total DAX hedging” Altmann stated.
Altmann also observed that market participants are largely overlooking existing risks. He noted that rising interest rates, with the yield on 30-year German government bonds reaching its highest level since 2011, have not yet dampened enthusiasm. “The immediate consequence of this is higher financing costs for companies, which directly impact profits” he explained.
The euro strengthened Wednesday morning, trading at 1.1709 US dollars, while the dollar was valued at 0.8540 euros.
Meanwhile, crude oil prices saw a marginal decline. A barrel of Brent crude was trading at 66.10 US dollars around 9:00 AM German time, down 2 cents, or 0.0 percent, from the previous day’s close.
