On Friday, the German DAX continued its downward trend, falling further into the red even after an initially weak trading session. By approximately 12:30 PM, the leading index had dropped to around 24,065 points, marking a 1.6% decline from the previous day’s closing level.
The poor performance was evident across many sectors; Heidelberg Materials, Infineon, and Siemens Energy traded at the bottom of the price list. Only a handful of stocks managed to buck the general trend, including SAP, Munich Re, and Rheinmetall.
Industry observer Thomas Altmann of QC Partners noted that market attention remains heavily focused on China, but said that major positive announcements have been lacking. Furthermore, several ongoing deals are falling short of high expectations.
He pointed to a lack of tangible progress concerning the situation in Iran. While Donald Trump has spoken about Chinese support, Altmann stated that China has provided no corroboration for these statements. He added that markets predictably react to these lack of breakthroughs regarding the Iran conflict: stock prices fall, interest rates rise, and oil prices increase. As long as there is no permanently stable peace in the region, volatility across all asset classes will remain high. Consequently, investor risk appetite will continue to be dictated by the state of the Strait of Hormuz.
On a currency front, the European common currency was weaker on Friday afternoon; the Euro cost 1.1637 US dollars, meaning that the dollar was available for 0.8593 Euros.
Commodities also saw significant movement. The price of gold saw a strong decline, falling by 2.1% in the afternoon to $4,554 per fine ounce, equating to €125.81 per gram. Conversely, the price of oil rose sharply. A barrel of Brent crude oil, sourced from the North Sea, cost $108.80 at noon German time, representing a 2.9% increase from the previous close.
