On Wednesday, the German DAX saw a slight gain, closing at 25,040 points on Xetra, representing a 0.2 percent increase from the previous day’s close. Despite starting the day slightly negative, the index recovered in the morning, dipped into negative territory in the afternoon, and ultimately finished just above the prior day’s level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, observed that the DAX continues to struggle to maintain the 25,000-point threshold. He noted that whenever investors become optimistic about a clear path for the German benchmark index to sustainably move above this round number, negative market conditions appear.
This “cold rain shower” materialized in the form of US ADP data. The figures reported only 98,000 new jobs, significantly falling short of the expected 122,000. The analyst explained that investors had been anticipating an acceleration of the positive labor market trend in recent weeks, a belief that was dispelled today. Consequently, Wall Street declined, dragging the DAX in Frankfurt down and causing it to relinquish some of its daily gains.
Despite the external pressures, there are glimmers of hope for the German economy. Lipkow commented that corporate sentiment is stabilizing, albeit at a low level. The purchasing managers’ index reached 50.3 in June. This figure not only placed it within the expected expansion zone but was also slightly higher than the anticipated 50.1. Furthermore, the growth rate of prices in June was 2.8 percent, lower than the expected three percent, helping to reduce inflationary pressure. A major factor in this positive development was the sharp drop in energy prices.
Leading the stock list in Frankfurt before market close were the shares of Rheinmetall and SAP, while Infineon stocks finished at the bottom of the list.
In commodity markets, the gas price fell. A megawatt-hour (MWh) of gas delivered in August cost 43 Euros, a 1 percent decrease from the previous day. If this pricing level holds steady, the consumer cost is estimated to be at least between nine and eleven cents per kilowatt-hour (kWh), inclusive of taxes and overheads.
Meanwhile, the price of oil dropped sharply. At approximately 5 PM Central European Time on Wednesday, a barrel of Brent crude in the North Sea cost $71.29, marking a 2.3 percent decrease (166 cents) compared to the previous trading day’s close.
In currency markets, the Euro weakened on Wednesday afternoon. One Euro exchanged for $1.1393, meaning the dollar was valued at 0.8777 Euros.
