On Thursday the DAX fell sharply. At the Xetra close the index was calculated at 24,309 points, a decline of 2.1 % compared with the previous day’s close. After a weak start, the index added to its losses in the afternoon.
Just before market close the shares of Siemens, EGA and Vonovia were at the top of the Frankfurt price list, while the SAP shares finished last, falling almost 16 %.
“If the biggest technology company listed in Frankfurt already shows signs of a growth slowdown at this stage, the DAX cannot help but drop nearly 500 points” commented Christine Romar, Head of Europe at CMC Markets. “Not only is SAP’s weight on the index numerically responsible for a large part of the losses, but the disappointment with Microsoft the previous day turned the numbers into another mood killer for the leading index, which had started the new trading year on such hopeful footing”.
Romar said SAP has almost stumbled over its own business model. “As Walldorf increasingly integrates AI into its processes, it may be overtaken in the meantime if today’s customers start using AI more themselves and move away from the costly SAP solution” she explained. “While management still talks of full order books that should translate into profitable earnings in the future, investors in the highly hyped U.S. tech stocks are not forgiving even a small growth deficit at the current high valuations”.
Meanwhile gas prices rose: the price for one megawatt hour (MWh) of gas for February delivery was €40, a 3 % increase over the previous day. If this level were to persist, it would imply a consumer price of at least about eight to eleven cents per kilowatt hour (kWh) including ancillary costs and taxes.
Oil prices jumped sharply: a barrel of Brent from the North Sea cost $70.78 at around 5 p.m. German time on Thursday afternoon, 3.5 % more than the previous trading day’s close.
The euro was slightly softer on Thursday afternoon: one euro was worth $1.1932, meaning one dollar could be bought for €0.8381.
