The DAX significantly declined on Thursday. At the close of trading on Xetra, the index was calculated at 24,664 points, marking a loss of 1.0% compared to the previous day’s close. Although the index fluctuated around Wednesday’s final level until early afternoon, it subsequently dropped sharply into negative territory.
Andreas Lipkow, Senior Market Analyst at CMC Markets, commented that the day’s performance in Frankfurt suggests investors do not view the current developments in the Middle East as a “free pass” for the DAX to resume its all-time high levels. He noted that “too much porcelain was smashed, and the medium- to long-term consequences of the war for the economy are completely open”.
The analyst further explained that companies initially absorbed most increases in energy prices, rather than passing those costs directly to consumers. However, this trend is expected to weaken in the coming months, especially if oil prices remain at high levels. While visible repercussions are already apparent, such as in air travel, more second-round effects could follow. According to Lipkow, the DAX is in a unique situation, as current price action is primarily influenced by developments in the energy markets. Although oil prices are declining, they remain at significantly higher levels than before the escalation of the Iranian conflict.
While news suggesting that the Strait of Hormuz may reopen to shipping traffic within hours maintains hope for regional normalization, Lipkow warns that investors might respond by engaging in extensive profit-taking. This could dampen the market, making new positive trade impulses scarcer.
In terms of stock performance on Thursday, shares of Henkel, FMC, and Continental topped the list of gainers in Frankfurt, while Rheinmetall bore the biggest losses.
Separately, commodity prices saw significant movement. The natural gas price dropped, with one megawatt-hour (MWh) costing €43 for June delivery-a one percent decrease from the previous day. This suggests a consumer price of at least nine to eleven cents per kilowatt-hour (kWh), including ancillary costs and taxes, if the price remains stable.
Oil prices fell sharply: A barrel of North Sea Brent crude cost $98.33 on Thursday afternoon, representing a drop of 10.5% (or 1,154 cents) from the close of the previous trading day.
In foreign exchange markets, the Euro was slightly stronger: the Euro cost $1.1764, meaning the U.S. dollar fetched 0.8501 Euros.
