The DAX remained in the red zone through Wednesday’s midday trading after a weak start. By around 12:30 p.m. the index stood at 23,675 points, 1.2 percent below the previous day’s closing level. Brenntag, Volkswagen and Bayer led the performance list, while Henkel, Rheinmetall and SAP were at the bottom.
“Our investors are gradually shifting from their earlier mildly positive view of the Eurozone’s economic outlook to a more cautious stance” said Andreas Lipkow, chief market analyst at CMC Markets. He added that the situation in the Middle East is pushing energy prices upward, which in turn is severely hurting the global economy. “The continued rise in crude oil prices is having a negative impact on inflation and overall economic performance across many sectors. The effect is most obvious in airlines, which are struggling with sharply higher jet‑fuel costs. This causality spills over into other areas, from logistics to the chemical industry”.
Lipkow warned that uncertainty remains the biggest problem, and “any stimulus, such as a potential release of oil reserves by countries, evaporates quickly”. “The responses cannot mitigate a prolonged disruption of energy supplies in Europe. Over the past years, many governments have effectively undermined their own energy policy. Now they must accept the consequences”.
Even Rheinmetall, a heavy‑weight in the DAX, provides little comfort today. “The defense company delivered solid numbers overall, but investor expectations were still significantly higher” the analyst noted. “While the company has full order books, it also faces higher costs and constrained capacities”.
