The DAX recorded a strong increase on Tuesday, closing the Xetra trading session at 24,044 points, marking a gain of 1.3 percent compared to the previous day’s close. Following a very positive start, the index continued to build on its gains throughout the day.
Andreas Lipkow, Chief Market Analyst at CMC Markets, attributed the rally to investor hopes for an imminent end to the conflict in Iran, stating that today the sentiment was “no news is good news”. He added that this optimism propelled the DAX back above the 24,000-point mark during trading. While this positive mood was not clearly reflected in energy prices, it did provide the DAX with an additional boost of positive momentum for the day.
Meanwhile, Lipkow noted that the earnings season has begun unevenly. He pointed out that quarterly figures from several companies are causing uncertainty across relevant sectors. After the banking sector was affected by Goldman Sachs’ figures the day before, the quarterly results from luxury conglomerate LVMH were not convincing. The French group appears to be feeling the pinch of consumer spending slowdown in the fashion sector. Regarding BMW’s financials, investors are still trying to make sense of the numbers. While the results show weaknesses in China, the market’s largest sales region, they suggest strength in the home market, indicating a potential trend reversal.
Towards the close of trading, stocks from Siemens, Deutsche Bank, and Infineon led the gains board in Frankfurt. The list of losers included shares of Brenntag, BMW, BASF, and Deutsche Telekom.
Separately, the natural gas price fell. A megawatt-hour (MWh) of gas for delivery in May cost 43 euros, which is a decrease of seven percent from the previous day. If this price level remains stable, it implies a consumer price of at least around nine to eleven cents per kilowatt-hour (kWh), inclusive of ancillary costs and taxes.
Oil prices also dropped significantly. A barrel of North Sea Brent crude was priced at $96.35 on Tuesday afternoon around 5 PM German time, a decline of 3.0 percent, or 301 cents.
The European common currency strengthened on Tuesday afternoon. The euro cost $1.1801, meaning the dollar was available for 0.8474 euros.
