The German stock market saw gains on Tuesday, with the DAX closing at 26,266 points, representing a 0.6 percent increase compared to the previous day’s close. After a positive start, the index maintained its achieved level throughout the midday trading session.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that the bullish mood in Frankfurt was driven by a revised upward growth rate for the German economy in the second quarter, along with an Ifo business climate index that surpassed expectations. Lipkow commented that these signals provide new support for investor hopes of a slow but sustainable economic recovery in Germany. He added that these positive signs are particularly encouraging given the challenges posed by high energy prices, geopolitical uncertainties, and disruptions in key supply chains. However, he cautioned that it remains uncertain how long the economy can hold up against these negative factors, or if the positive trend can gain more momentum.
In the United States, improved than expected construction permits and ADP labor market data contributed to a positive market sentiment. Focusing on the semiconductor sector, which remains a key area of interest in both New York, Asia, and Europe, investors initiated a “bargain hunt” after previous weaker days. Lipkow pointed out that these lower price points offer interesting entry opportunities, confirming that the “AI story” remains intact. He suggested that the dynamic of this sector is expected to be addressed by Nvidia later tomorrow evening.
In commodity markets, the gas price fell significantly. A megawatt-hour (MWh) of gas delivered in September cost 66 euros, a three percent drop from the previous day. If this price level remains stable, this implies a consumer price of at least around 11 to 14 cents per kilowatt-hour (kWh), including ancillary costs and taxes.
Oil prices also dropped sharply. A barrel of Brent crude in the North Sea fetched 89.20 US dollars on Tuesday afternoon, about 3.2 percent less than the previous day’s closing price.
Meanwhile, the Euro strengthened slightly in the European currency market. The euro cost 1.1672 US dollars on Tuesday afternoon, meaning the dollar was available for 0.8568 euros.
