The Dax ended the week strongly, closing at 25,087 points on the Xetra exchange. This represented a 1.1 percent gain compared to the previous day’s close, after the index saw a positive start and maintained its gains consistently.
According to Andreas Lipkow, Chief Market Analyst at CMC Markets, investor focus has shifted back strongly toward German equities as the week concluded. He noted that since U.S. financial markets are closed for the holiday on Monday, events happening over the upcoming weekend will have an increased impact on European financial markets.
The bond market also appears to be normalizing, offering investors greater confidence. Lipkow explained that the yields on highly watched French government bonds cooled off again during the trading day.
He pointed out that currently, investors are driven by three main factors: energy prices, inflation risks, and bond yields. Furthermore, the AI sector is under increasing scrutiny, and revenue forecasts for many of its companies are being questioned more acutely. This is particularly problematic because semiconductor and AI stocks were recently major drivers of the rise in U.S. stock markets.
In terms of individual stock performance, shares of Zalando, SAP, and Siemens led the list. Only a small number of Dax 40 companies recorded losses, most notably Deutsche Telekom.
On the raw materials front, the price of natural gas rose; a megawatt-hour (MWh) of gas for November delivery cost 81 Euros, a three percent increase from the prior day. If this price remains stable, it implies a consumer price of at least around 13 to 16 cents per kilowatt-hour (kWh), including taxes and ancillary costs.
Crude oil also saw an increase. On Friday evening, a barrel of Brent crude traded for $104.70, which was 45 cents higher than the closing price of the previous trading day.
Finally, the European community currency was slightly weaker on Friday evening. The Euro was trading at $1.1193, meaning the dollar could be purchased for 0.8934 Euros.
