The DAX index experienced a dip on Wednesday, closing at 24,195 points, which marked a 0.3% decrease compared to the previous day’s close. After a positive start, the index fell during the afternoon session, despite some temporary recovery.
According to Andreas Lipkow, Chief Market Analyst at CMC Markets, European investors remain preoccupied with concerns and unease regarding the proposed extension of the limited ceasefire in the Iran conflict, despite indices maintaining a rally mood in New York. He noted that the blockade of the Strait of Hormuz is exempt from this agreement, meaning shipping traffic remains suspended. This situation is reflected in oil prices, with the North Sea grade Brent once again trading above $100 per barrel.
Lipkow added that he believes European economies will be hit harder by rising energy costs than those in the United States, a sentiment that investors are currently factoring into their valuations. Furthermore, he suggested that the unilaterally prolonged ceasefire does not simplify the Middle East situation; rather, it complicates it. This is because it is still unclear which party from Iran can sustainably lead negotiations with the U.S., or if the potential outcomes can actually be implemented.
Consequently, the focus of investors has shifted toward the ongoing earnings season. They are hoping to gather information about the economic health of various sectors. In another market update, noted that the US aircraft manufacturer Boeing failed to meet market expectations based on its delivered planes. On the agenda for later that evening are Tesla’s figures, where the sentiment remains largely watchful, coupled with high expectations.
In the Frankfurt trading list, Siemens Energy shares led the gains until shortly before the market closed, followed by RWE and Infineon. Conversely, Deutscher Telekom, MTU, and Commerzbank shares settled at the bottom of the list.
Separately, natural gas prices rose; a megawatt-hour (MWh) of gas for May delivery cost 43 euros, representing a four percent increase from the previous day. Should this price level remain stable, this implies a consumer price of at least around nine to eleven cents per kilowatt-hour (kWh), inclusive of ancillary costs and taxes.
Oil prices surged as well. On Wednesday afternoon, around 5 PM German time, a barrel of the North Sea grade Brent cost $101.40, a 3.0% increase from the previous day’s close.
Regarding currency movements, the European community currency was slightly weaker by Wednesday afternoon: one Euro cost $1.1723, meaning one Dollar could be acquired for 0.8530 Euros.
