The DAX started Wednesday’s trading session virtually unchanged. The index was calculated at approximately 24,425 points around 9:30 AM, representing a 0.03 percent decline from the closing level of the previous day. Leading the pack were Qiagen, Infineon, and Symrise, while SAP, Heidelberg Materials, and Scout24 finished at the top of the list.
Jochen Stanzl, Chief Market Analyst at Consorsbank, commented on the prevailing market forces, noting that “the expectation of rising interest rates in the Eurozone has not only dampened investor enthusiasm for technology stocks but has also weighed down cyclical and export-dependent companies within the DAX.” Stanzl added that the inflation data from the United States was therefore the most closely watched event on the Frankfurt floor for the day, as it could cement the expectation that the US central bank would finally abandon its preference for recently falling interest rates next week.
Stanzl also said that “investor sentiment has turned due to fears of a rate reversal.” Since the strong labor market data released last Friday, the global stock market has been pressured from a yield perspective. The recent sell-off in tech stocks yesterday served as a warning sign; even the popular “Buy-the-Dip” strategy for private investors had ceased to be effective ahead of the important SpaceX IPO. Technology stock prices have fallen to new lows. “The concern is growing that central banks will tighten monetary policy, leading investors to withdraw more capital from already highly valued technology stocks.”
In other economic news, the European common currency was slightly stronger this Wednesday morning. The Euro traded at 1.1553 US dollars, meaning the dollar was available for 0.8656 Euros. Meanwhile, the price of oil saw a decrease: a barrel of North Sea Brent crude cost $91.19 around 9 AM German time, which was 0.3 percent-or 26 cents-less than the close of the previous trading day.
