The major German index, the Dax, continued to fall on Monday throughout the day, after a weak start. Around 12:30 PM, the index had fallen by 1.3 percent compared to the previous day’s closing level, reaching approximately 24,370 points. RWE, the Deutsche Börse, and Commerzbank topped the list of decliners, while SAP, MTU, and Volkswagen recorded gains.
Andreas Lipkow, a chief market analyst at CMC Markets, commented that the uncertainty returned to the stock market over the weekend, despite much hope shown on Friday afternoon. He added that the recently increased oil prices are causing concern among investors. Lipkow noted that regardless of whether oil prices cost above or below $100 per barrel, the main concern lies with the trend and how long the price remains at an elevated level, as this affects inflation rates and consumer spending.
Regarding the Middle East, Lipkow said the situation has deteriorated again and that news headlines from the region are becoming increasingly ephemeral. He suggested that every delay in negotiations between the warring parties diminishes the incentive for new solutions, which in turn lowers investor motivation to buy stocks. He implies that any ceasefire is essentially on paper, given the difficulty in fully controlling and extinguishing the numerous smaller flare-ups in the region and Iran.
According to the market expert, the coming weeks are expected to remain volatile and potentially hold many surprises. He pointed out that combining this instability with the ongoing earnings season could create an explosive mixture for financial markets, a pattern recently observed following Netflix’s quarterly results. He cautioned that those who become overconfident could face a sharp downturn.
On a separate note, the European common currency strengthened by midday Monday; the euro cost $1.1767, while the dollar was priced at 0.8498 euros. Meanwhile, oil prices increased. A barrel of Brent crude oil, sourced from the North Sea, cost $94.55 around noon German time on Monday afternoon, representing a 4.6 percent increase from the close of the previous trading day.
