The Dax index showed a notable decline on Thursday, settling at 23,807 points by the close of Xetra trading, marking a loss of 1.1 percent compared to the previous day’s closing level. Throughout Thursday, the Dax dipped further into negative territory after initial losses.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that investors in Frankfurt remain highly sensitive to political and military developments in the Middle East. He pointed out that technology stocks like SAP and Infineon were particularly under selling pressure on the Dax this day, and even automobile manufacturers were among the bottom performers. Although the gains seen the day before have not been entirely erased, the risk of more significant price drops in the coming trading days remains latent.
According to Lipkow, both the US labor market data and economic growth figures were weaker than anticipated. He added that the PCE core rate remained stable, failing to show any signs of easing inflationary pressures in the United States. He stressed that this trifecta of economic indicators will receive close attention from investors in the coming months. He explained that the conflict involving Iran is directly and indirectly impacting the evolution of the US labor market and inflation. Furthermore, the US central bank’s actions regarding monetary policy are subject to these developments. Currently, the financial market prices in a potential interest rate cut in the fourth quarter of this year.
Leading the top performers near the close of trading were shares of Brenntag and BASF, while SAP shares recorded the lowest performance.
In other markets, the gas price increased, with one megawatt-hour (MWh) of gas for delivery in May costing 46 euros, which is one percent more than the previous day. Should this price level remain stable, this implies a consumer price of at least around nine to eleven cents per kilowatt-hour (kWh), inclusive of ancillary costs and taxes.
The price of oil rose sharply; a barrel of North Sea Brent crude cost $99.11 on Thursday afternoon around 5 PM German time, representing a 4.6 percent increase from the previous day’s closing price.
Finally, the European community currency strengthened on Thursday afternoon. The euro cost $1.1698, translating to the dollar being available for 0.8548 euros.
