The DAX saw little change at the start of the week. The index closed on the Xetra market at 24,350 points, marking a gain of 0.1 percent compared to the previous trading day.
Andreas Lipkow, Chief Market Analyst at CMC Markets, explained that “investors in Frankfurt are trapped between the seasonal exit effect in the stock market during May and events in the Middle East”. He added that the rising oil prices are constantly reigniting inflation fears, thus leading to caution on the stock exchange.
For this reason, the picture within the DAX was mixed today. Investors are not reallocating their portfolios; instead, what is occurring is a classic rotation of sectors, which offers little room for sustainable liquidity inflows. Consequently, sectors such as energy stocks and select pharmaceutical companies were sought after today. Stocks from BASF and Brenntag also managed to be on the winner list. Conversely, shares in Rheinmetall and Gea continued to be sold off. Most investors’ objective is maintaining a defensive and therefore risk-averse orientation, while simultaneously not wanting to forgo potential capital gains. This strategy allows the investment level to be maintained and risks to be generally adjusted for better suitability.
Furthermore, the market is focused on macroeconomic data and upcoming political events, such as the meeting between U.S. President Donald Trump and Chinese President Xi Jinping starting Thursday. Lipkow noted: “Starting Friday, the new central bank chairman, Kevin Warsh, will significantly shape monetary and interest rate policy in the United States”.
The common European currency was slightly stronger on Monday afternoon: the Euro cost 1.1781 U.S. Dollars, meaning the dollar was available for 0.8488 Euros.
Gold prices benefited, with a spot ounce priced at $4,731 in the afternoon (+0.3 percent), equating to €129.10 per gram.
Oil prices rose significantly. A barrel of Brent crude from the North Sea cost $103.60 on Monday afternoon around 5 p.m. German time, representing a 2.3 percent increase compared to the close of the previous trading day.
