The German stock index, the Dax, started the trading day positively on Tuesday morning. Around 9:30 a.m., the leading index was calculated at approximately 25,415 points, achieving a gain of 0.6 percent compared to the previous day’s closing level.
The Dax initially mirrored the positive trends seen in the technology sector. According to Andreas Lipkow, Chief Market Analyst at CMC Markets, the Nasdaq 100 topped concerns about rising bond yields with a new record high on Wall Street, a movement that was also reflected by technology-heavy exchanges in Asia.
This situation has left investors facing a dilemma across global financial markets. On one hand, there are the AI and semiconductor companies boasting trillion-dollar valuations; on the other, there are government bonds offering increasingly attractive yields. Yields exceeding five percent on ten-year government bonds are attracting significant interest from many investors, increasingly positioning them as a genuine investment alternative.
However, the start of trading in Frankfurt was hampered by weak German industrial orders. Industrial orders plummeted by 10.6 percent, significantly more than anticipated. This decline is primarily attributed to a sharp decrease in large contracts from sectors such as defense, shipbuilding, and aircraft manufacturing. Although investors have acknowledged the poor data so far, its immediate impact is limited.
As today’s agenda offers few new incentives, the competition between technology stocks and bond yields is likely to dominate trading. Lipkow believes that the AI fervor is currently winning this duel; nevertheless, as bond market yields become more attractive, the standard for further stock price increases also rises.
In currency markets, the Euro was slightly weaker in the morning, trading at $1.1217 per dollar, meaning the dollar was available for 0.8915 Euros. Meanwhile, the price of gold eased slightly, with fine ounces trading at $4,137 in the morning, representing a 0.1 percent decrease. This equates to a price of 118.59 Euros per gram. Concurrently, the oil price fell. By 9 a.m. Central European Time, a barrel of Brent crude from the North Sea was priced at $99.62, which is 70 cents or a 0.7 percent reduction compared to the previous day’s close.
