The German market saw a significant surge at the start of the week. By the close of trading on Xetra, the Dax index calculated at 26,001 points, marking a 1.5 percent increase from the previous day. After a positive morning session, the Dax tapped a new all-time high, briefly reaching approximately 26,097 points around 4:41 PM, before experiencing a slight retreat from those gains.
As Andreas Lipkow, Chief Market Analyst at CMC Markets, commented, “The Dax didn’t just set a new record today; it successfully crossed the 26,000-point mark.” He noted that this outcome surprised many investors, given the current climate of risks and the relatively muted outlook for the German economy.
Lipkow attributed the robust start to renewed negotiations between the US and Iran, which were recently reinstated by US President Donald Trump. He also cited positive momentum from falling energy prices, reduced fears of inflation, and easing interest rate worries.
However, the positive trend faltered in the afternoon when Iran denied the negotiations announced by Trump. Lipkow stated that the geopolitical situation remains murky, with key negotiating parties from countries such as Pakistan, Oman, and Jordan shaping the narrative. Furthermore, he explained that a negotiation vacuum has developed within Iran itself due to the early removal of major political and military leaders. He cautioned that future trading days will likely continue to be defined by these uncertainties and conflicting statements.
Regarding the broader economic picture, the recently released Purchasing Managers’ Indices provide support to Europe’s nascent growth, maintaining a positive hopeful trend. Despite this, Lipkow warned against forming any sense of euphoria, as the positive momentum could quickly be undermined. Nevertheless, these indicators helped fuel the Dax’s strong rally this week.
On the stock market, Siemens Healthineers, Deutsche Telekom, and SAP led the performance lists up until shortly before the market closed, while RWE, Bayer, and Beiersdorf finished at the bottom.
In related market movements, the price of natural gas dropped by four percent. A megawatt-hour (MWh) of September delivery gas cost €58, which suggests a consumer price of at least around ten to thirteen cents per kilowatt-hour (kWh), including taxes and supplementary costs, should current levels hold.
Oil prices also fell sharply. Brent crude, a North Sea variety, cost $83.86 per barrel on Monday afternoon, representing a reduction of 4.6 percent (407 cents) compared to the previous close. The European common currency weakened on Monday afternoon; the Euro traded at $1.1503, meaning the dollar was available for €0.8693.
