The German index, the Dax, began trading on Wednesday with gains following the US midterm elections. The leading index was calculated at approximately 25,970 points around 9:30 AM, representing a 0.4 percent increase over the previous day’s closing level. Heidelberg Materials, Continental, and Deutsche Bank led the list of stocks, while Rheinmetall, Symrise, and Hannover Rück closed at the bottom of the chart.
Jochen Stanzl, Chief Market Analyst at Consorsbank, commented, “The US has voted, and the result is clearer than expected.” He noted that even though he wasn’t on the ballot, the day’s election loser was Donald Trump. Stanzl added that with the US set to have a divided government in two months, the risk of major political changes has been reduced, which historically acts as a positive factor for the Dax market due to decreasing political uncertainty.
However, Stanzl also warned that a new Congress might not prevent a major military operation against Iran. He recalled that Trump had previously announced in early October that he would not attack Iran again before the election because high gas prices were costing Republicans votes. This calculation, Stanzl stated, is now void: “The election is lost, and the price has been paid.” This ongoing risk of a renewed Iranian attack hangs over the market like a sword of Damocles.
In currency markets, the European common currency was stronger on Wednesday morning. The euro cost $1.1241, meaning that the dollar was trading for 0.8896 euros.
