The German DAX index experienced a significant surge on Wednesday, closing at 24,550 points – a 1.4% increase compared to the previous day’s close. Following a positive start to trading, the index reached a new all-time high of 24,609 points by 3:51 PM, before relinquishing a slight portion of those gains.
Market analyst Andreas Lipkow commented on the day’s performance, stating, “The sentiment that ‘no news is good news’ continues to drive investment in German companies”. He added a note of caution, observing, “The current situation can feel unsettling. Numerous potential risk factors remain unresolved, yet market participants appear to be overlooking these dangers.
Lipkow expressed concern that a seemingly innocuous social media post from the US President could potentially destabilize European stock markets. He emphasized the index’s lofty valuations, suggesting that the market is built on a “very shaky foundation”. He further noted that each new record high compels cautious investors to enter the market, perpetuating a cycle of further gains, a trend which he believes doesn’t accurately reflect the global economic climate.
Throughout the trading day, shares of Siemens, Deutsche Bank and Mercedes Bank led the gains, while Sartorius shares were at the bottom of the list.
Natural gas prices saw a slight increase; August delivery contracts reached €34 per megawatt hour (MWh). This implies a consumer price of at least 8 to 10 cents per kilowatt-hour (kWh), inclusive of surcharges and taxes, if this price level becomes sustained.
Crude oil prices also edged upwards modestly; a barrel of Brent North Sea crude traded at $70.25, representing a 10-cent or 0.1% increase from the previous day’s closing figure.
The Euro slightly weakened during Wednesday afternoon trading, exchanging at $1.1710, with a dollar equivalent of €0.8540.
