The DAX saw significant gains on Thursday. At the close of trading on Xetra, the index reached 25,581 points, marking a rise of 2.2 percent compared to the previous day’s closing level. After a positive start, the DAX continued its climb, setting a new all-time high of approximately 25,656 points at 3:51 PM.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that the DAX clearly benefited from the low weighting given to pure technology companies on this day. He added that even shares of Infineon, which initially suffered from the decline in semiconductor stocks, were pulled into positive territory by the other 39 companies during the day. Lipkow further noted a strong buying interest in Bayer shares, whose management is pursuing a new corporate structure following a legal ruling to better consolidate its plant protection business.
Lipkow explained that investors currently view cyclical sectors that have recently been less sought after due to their high reliance on economic cycles as offering attractive entry points. He stated that hope for an economic recovery is now driving rotation in the market, causing banks and financial stocks to join the winners list.
The analyst credited the DAX’s surge to better-than-expected US labor market data that surfaced in the afternoon. Although rising wages were only slightly above expectations and initial applications for unemployment benefits were within the anticipated range, the number of newly created jobs fell short, posting 49,000 instead of the anticipated 107,000. However, Lipkow cautioned that companies rarely create new jobs precisely at the middle of the year; instead, they focus on meeting target figures. Therefore, investors did not place much significance on this deviation. Regarding the US labor market, he concluded that artificial intelligence remains the greatest paradigm shift, and it now remains to be seen how the system will adapt to these changed conditions.
Leading the market gains toward the end of the session were the stocks of Bayer and Rheinmetall. Aside from these, only three components of the DAX 30-Scout 24, Hochtief, and Infineon-were trading in the negative.
In separate market movements, the price of natural gas climbed. A megawatt-hour (MWh) of gas for August delivery cost 44 Euros, a three percent increase from the previous day. If this price level remains sustained, this translates to a consumer price of at least around nine to eleven cents per kilowatt-hour (kWh), including ancillary costs and taxes.
Conversely, oil prices dropped noticeably. At around 5 PM German time on Thursday, a barrel of North Sea Brent crude cost $70.76, which was 81 cents, or 1.1 percent, less than the end of the previous trading day.
The Euro strengthened against the US dollar on Thursday afternoon, costing $1.1448; consequently, the dollar traded for 0.8735 Euros.
