The DAX index showed a significant decline as the week drew to a close. At the close of trading on Xetra, the index was calculated at 24,339 points, marking a loss of 1.3 percent compared to the previous day’s closing figures. After a weak start, the DAX remained in the negative territory, extending its losses throughout the afternoon.
Market analyst Andreas Lipkow commented that while the rally continued unabated in New York, the DAX was unable to regain its previous momentum following the week’s dramatic price movements, including its temporary jump above the 25,000 mark. He stated that all the week’s gains had been erased. According to Lipkow, the DAX is struggling with persistently high oil prices, which negatively impact economic forecasts for the Eurozone and, by extension, Germany.
Lipkow warned that the challenging period is far from over, predicting a negative effect on corporations from two fronts. Not only are operating costs rising for companies, but consumer spending is also expected to slow down due to elevated costs for energy and food. Therefore, he concluded that investing in German stocks currently involves a considerable degree of uncertainty regarding how and if this negative scenario will materialize.
In terms of market performance, Infineon’s shares led the stock list, while Rheinmetall and Allianz recorded the lowest prices.
Meanwhile, commodity prices also saw notable shifts. The Brent grade oil price rose significantly, costing $101.90 per barrel around 5 PM German time on Friday, which represented an increase of 1.8 percent from the previous trading day’s close. Similarly, the price of natural gas increased; a megawatt-hour (MWh) of gas for delivery in June cost 44 Euros, or one percent more than the day before. If this price level remains stable, it implies a consumer price of at least between nine and eleven cents per kilowatt-hour (kWh), inclusive of auxiliary costs and taxes.
Finally, the Euro was slightly stronger on Friday afternoon, trading at $1.1764 per Euro, while a Dollar was worth 0.8501 Euros.
