The market opened on Thursday with slight gains. Around 9:30 AM, the DAX index was calculated at approximately 24,100 points, marking a 0.1% increase over the previous day’s closing level. Companies leading the index list included BASF, SAP, and Infineon, while Deutsche Telekom, Daimler Truck, and Qiagen finished in the top positions.
Jochen Stanzl, Chief Market Analyst at Consorsbank, noted that although the DAX is hesitant, growing optimism surrounding the Iran conflict is allowing global stocks to reach new record highs. He characterized this as a typical pattern for stock markets: “The psychology of investors has shifted from extreme fear through a neutral stance to-currently-greed”. This development means that investors’ expectations are always moving higher. Currently, many are buying with the expectation of questioning those gains later, although the time for such skepticism will eventually arrive. Stanzl added that impatience will build regarding progress in negotiations between Iran and the US if tangible results are not forthcoming.
According to Stanzl, investors are betting on a quick return to the status quo. He pointed out that since China’s GDP is growing by five percent, the economy, which has started the new year dynamically, will face high energy prices this quarter. Investors might interpret this data as a model for the ongoing reporting season and believe the Iran conflict will ultimately prove to be only a temporary dip in growth. There is also a shift in expectations regarding interest rates. Investors are moving away from the assumption that the ECB will raise interest rates. Furthermore, even though oil prices are expected to remain high for the foreseeable future, the specter of inflation is gradually but steadily receding from the market.
The Euro was slightly weaker at the start of the day on Thursday, trading at 1.1797 US dollars per Euro, meaning a dollar cost 0.8477 Euros. Meanwhile, oil prices increased. A barrel of Brent crude oil at around 9 AM German time was priced at 95.50 US dollars, an increase of 0.6 percent, or 57 cents, compared to the close of the previous trading day.
