The DAX saw gains on Thursday, closing the trading session on Xetra at 25,717 points, representing a 0.7 percent increase compared to the previous day’s close. The index successfully expanded its gains during the afternoon session after a positive start.
Andreas Lipkow, Chief Market Analyst at CMC Markets, attributed the optimism in the stock markets to the US Federal Reserve’s interest rate decision. “The DAX managed to continuously build its gains throughout the day, running toward 26,000 points,” he commented. He stressed that the easing factor for investors was less about the interest rate hike itself and more about the prospect of a clear and discernible monetary policy line in the US.
According to the analyst, the Fed’s decision significantly reduced pressure on financial markets while simultaneously granting the central bank more maneuvering room. Lipkow added that the focus now shifts to regaining confidence in the US bond market, fueled by the newly established policy clarity. He noted that the trajectory of long-term yields will be decisive, cautioning that they “will not decline overnight.” For yields to drop, investors first need to restore stronger faith in US government bonds; while the Fed can pave the way for lower returns, the bond market must ultimately follow through.
The DAX benefits indirectly from this improvement, but the primary driver is the return of risk appetite among international investors. However, Lipkow cautioned that German stocks remain a bet on a cyclical recovery in Europe, a recovery heavily reliant on the continued performance of the US economy.
Another factor supporting the market, in Lipkow’s opinion, was the decline in energy prices. News concerning new oil supply routes in the Middle East pushed Brent crude closer to the psychologically important $100 mark. He suggested that the closer the price gets to this threshold, the greater the relief felt in stock markets would be. A sustained drop below $100 could reignite inflation concerns, which would provide an additional boost to European stock market recovery.
During the day, the shares of Siemens Energy, Qiagen, and Volkswagen led the performance chart, while Heidelberg Materials, Deutsche Telekom, and Fresenius Medical Care finished at the bottom.
Meanwhile, gas prices dropped. A megawatt-hour (MWh) of gas for October delivery cost 77 euros, which was two percent lower than the previous day. If this price level holds, it implies a retail consumer price of at least around twelve to 15 cents per kilowatt-hour (kWh), including taxes and ancillary costs.
Oil prices also declined. On Thursday afternoon at 5 PM German time, a barrel of North Sea Brent crude cost $103.50, representing a decrease of 235 cents, or 2.2 percent, compared to the close of the preceding trading day.
In currency markets, the European community currency was slightly stronger on Thursday afternoon. The euro traded at $1.1480, meaning the dollar was available for 0.8711 euros.
