The DAX index declined on Tuesday afternoon. By the Xetra close, the index registered 24,018 points, marking a decrease of 0.3 percent compared to the previous day’s closing figures. Although the index initially fell, it climbed into positive territory around noon before falling back into negative ground.
Market analysts pointed to the news regarding the withdrawal of the United Arab Emirates from OPEC and OPEC+ as a major shock to financial markets. According to Andreas Lipkow, Head Market Analyst at CMC Markets, this anticipated step is expected to mark a critical turning point in the organization’s function and influence. While the long-term impact on oil prices remains uncertain, he stressed that it fundamentally represents an erosion of the global oil cartel.
Furthermore, Lipkow noted that investor selling in Frankfurt was fueled by the failure of negotiation between the United States and Iran. This increases the risk of continued military conflicts in the Middle East, a danger that is reflected in crude oil prices.
In other economic quarters, the inflation risk persists and could materialize suddenly, potentially accompanied by unexpected changes in central bank interest rate forecasts. Lipkow observed that consumer inflation expectations, according to an ECB survey, have risen sharply. For the next twelve months, consumers anticipate inflation rates of four percent, a noticeable increase from the previous estimate of only 2.5 percent. Although current inflation rates remain manageable, prices in the energy and food sectors are already significantly inflated. This gives added weight to the upcoming ECB meeting scheduled for Thursday, which is anticipated to lead to a change in monetary policy communication tone-a sentiment already evident in the rising yields on the bond market.
Regarding market performance, Commerzbank and Merck led the stocks by the time the market neared closing, while Qiagen recorded the weakest performance.
Commodity prices saw mixed movements. The gas price dropped, with a megawatt-hour (MWh) of gas for delivery in May costing 44 Euros, a two percent decrease from the day before. If this price level remains stable, it implies a consumer price of at least nine to eleven cents per kilowatt-hour (kWh), inclusive of ancillary costs and taxes.
Conversely, the price of oil rose sharply. A barrel of North Sea Brent crude cost $110.60 on Tuesday afternoon, marking a 2.2 percent increase from the previous market close.
At the currency front, the European common currency was slightly weaker on Tuesday afternoon. The Euro cost 1.1705 US dollars, meaning the dollar was available for 0.8543 Euros.
