The German stock market benchmark, the DAX, experienced a notable decline Friday, closing at 23,877 points – a 0.7% decrease from Thursday’s closing value. Despite this daily dip, the index retains a weekly gain of 1.3%, suggesting underlying investor confidence remains, albeit fragile.
The session’s performance underscored a clear divergence within the index. Siemens-related stocks – Siemens Energy, Siemens Healthineers and the parent Siemens – bucked the downward trend, with Siemens Energy leading the surge, posting nearly a ten percent increase. This positive performance is directly attributed to the company’s upward revision of its forecasts and the announcement of its first dividend payout in four years – a move that signals a potential shift towards financial stability after a period of significant challenges. Some analysts are questioning whether Siemens Energy’s optimism is overly exuberant, particularly considering ongoing geopolitical uncertainties and potential supply chain vulnerabilities.
Conversely, Bayer, Commerzbank and Zalando were significant laggards, reflecting broader concerns about the pharmaceutical, banking and online retail sectors respectively. Bayer’s struggles are being linked to ongoing litigation surrounding its Roundup herbicide, while Commerzbank continues to grapple with the pressures of a challenging economic climate and demands for greater profitability. Zalando’s decline highlights the increasing vulnerability of online retailers facing intense competition and shifting consumer spending habits in a period of economic slowdown.
Market analyst Christine Romar of CMC Markets cautioned that the trajectory of the U.S. stock markets this weekend will likely dictate the DAX’s next moves. A rebound on Wall Street would allow the DAX to successfully test the 23,600 level. However, a failure to recover could expose the German bourse to its first major “autumn storm” of the year, implying potentially significant volatility and downward pressure.
The euro also weakened slightly on Friday afternoon, trading at $1.1615, reflecting broader anxieties about the Eurozone’s economic resilience and the continued impact of monetary policy decisions. The currency’s movement raises questions regarding the sustainability of current exchange rates and the potential for further depreciation, which could exacerbate inflationary pressures within the Eurozone.
