The DAX climbed sharply on Wednesday. At the close of trading on Xetra, the index was calculated at 24,919 points-a gain of 2.1% compared to the previous day’s closing level. Following a positive start, the DAX managed further gains until noon, though some of those profits were later shed in the afternoon.
Andreas Lipkow, Chief Market Analyst at CMC Markets, attributed the rally in European stock indices to a market surge following news of an imminent deal between the US and Iran. According to Lipkow, the two parties are said to have agreed on a 14-point plan aimed at ending the conflict in Iran. Furthermore, Iranian state media has reported that a civilian shipping passage through the Strait of Hormuz will be allowed.
However, the coming weeks are expected to reveal the full economic impact of the Iran conflict and clarify inflation trends. Lipkow noted that for Europe, the previously released Purchasing Managers’ Indices and producer prices painted a clear picture. He stated that the economic environment remains strained, with producer prices rising slightly above expectations at 3.4%.
In market movement, MTU led Frankfurt’s performance list, followed by Continental and Airbus shares. The last major stocks listed were those of Zalando and BASF.
In commodity movements, gas prices decreased. A Megawatt-hour (MWh) of gas supplied in June cost €44, a decline of 6% from the previous day. Should this price level persist, it implies a consumer cost of at least nine to eleven cents per kilowatt-hour (kWh), including ancillary costs and taxes.
Oil prices saw a sharp drop. A barrel of North Sea Brent crude cost $98.33 on Wednesday afternoon (around 5 PM CEST), representing a decrease of 10.5% compared to the close of the preceding trading day.
Currencies also showed shifts, with the Euro strengthening on Wednesday afternoon. The Euro cost $1.1751, meaning the dollar was consequently valued at 0.8510 Euro.
