The DAX index registered a modest gain on Tuesday, closing at 23,711 points – a 0.5% increase compared to the previous day’s close. While the market started positively, the session saw fluctuating performance before ultimately concluding with further gains. However, analysts caution that the sustained upward trajectory required to challenge all-time highs remains uncertain.
“The German stock index is laboriously clawing its way into December, having already underperformed expectations in November” stated Christine Romar, Head of Europe at CMC Markets. “At least the downward trend hasn’t resumed, averting any significant technical setbacks.
Romar highlighted the precarious nature of the market’s current stability, emphasizing that a significant geopolitical shift – specifically, a potential resolution to the conflict in Ukraine – appears to be the most likely catalyst for a substantial rally. The prospect of intensive negotiations in the coming days offers a flicker of hope, although the outcome remains highly unpredictable.
Adding to the market’s complex dynamics, the beleaguered Bayer, a chemical and pharmaceutical giant plagued by protracted legal battles, could be on the cusp of a much-needed reprieve. An intervention by the Supreme Court, potentially rendering numerous outstanding lawsuits moot, is seen as a possible trigger. Such a development would not only alleviate the significant €7 billion in reserved liabilities currently weighing on Bayer’s balance sheet, but also dismantle the pervasive risk discount attached to the stock following the contentious Monsanto acquisition and initial flood of legal claims.
Throughout much of Tuesday’s trading, Bayer shares topped the Frankfurt stock exchange leader board, closely followed by Siemens Energy, Rheinmetall and Deutsche Bank. Conversely, Symrise, Zalando and Henkel shares suffered losses and found themselves at the bottom of the rankings.
The decline in energy prices offered a small measure of relief. Natural gas for delivery in January fell to €28 per megawatt-hour (MWh), representing a 1% decrease from the previous day. This translates to a consumer price of approximately 7 to 9 cents per kilowatt-hour (kWh), including ancillary costs and taxes, should this price level prove enduring – a scenario considered by many to be highly speculative.
Brent crude oil similarly registered a slight decline, trading at $63.06 per barrel by late afternoon. This marked an 11-cent or 0.2% decrease compared to the end of the previous trading day, demonstrating ongoing sensitivity to geopolitical factors and broader economic uncertainty.
The euro also weakened marginally, trading at $1.1607, with one US dollar fetching €0.8615. This reflects continued pressure on the currency amid concerns about European economic headwinds and differing monetary policies across the Atlantic.
