The German stock index, the DAX, began the trading day on Tuesday amid losses. Around 9:30 AM, the leading index was calculated at approximately 25,725 points, representing a 1.0% drop compared to the previous day’s closing level. Leading the list of gains were Bayer, Siemens Healthineers, and RWE, while the companies that recorded losses included Infineon, Zalando, and MTU.
Jochen Stanzl, Chief Market Analyst at Consorsbank, noted that two issues are currently dominating the market: the outcome of the upcoming by-elections, which will be known overnight, and the price of oil, which experienced its largest single-day loss in three months yesterday. Stanzl explained that globally, there is a growing sense of risk aversion towards stocks, driven by mounting concerns over expensive AI investments and the political uncertainty surrounding the US by-elections.
Historically, the stock market has preferred scenarios where a US president with full authority loses one or both chambers of Congress during an election. This outcome tends to reduce the risk of further political upheaval and, consequently, diminishes uncertainty, which has often had a positive effect on the markets in the past, according to Stanzl. However, the market still awaits clarity on whether such a scenario will materialize again. He added that should the uncertainty surrounding the election results dissipate, the market could experience a general sigh of relief, but geopolitical risks related to the Iranian situation remain high.
Meanwhile, the Euro strengthened slightly in the morning, exchanging at 1.1198 US dollars. In comparison, a dollar was trading for 0.8930 euros.
The price of oil recovered. Around 9:00 AM Central European Time, a barrel of Brent crude oil traded at $106.20, reflecting a 1.4% increase from the previous day’s closing price.
