The DAX showed significant gains on Thursday, closing at 24,292 points-an increase of 1.4 percent compared to the previous day’s close. After starting the week weakly, the index rebounded on Wednesday and capitalized on the momentum.
According to Andreas Lipkow, Chief Market Analyst at CMC Markets, the positive trading environment opening in New York lifted the mood in Frankfurt. He noted that oil prices decreased, and the Japanese Yen experienced an unexpected support across both the US Dollar and the Euro, suggesting potential intervention by the Bank of Japan.
Lipkow stated that this shift led to a more favorable atmosphere across European stock markets. While most macro data from Europe were generally in line with expectations, the European Central Bank’s decision to keep interest rates unchanged was not a surprise. However, the analyst pointed out that the ECB adopted a tone regarding inflation expectations similar to that of the US Federal Reserve. Despite this, the ECB sees the European economy facing greater risks due to the Middle East situation, slightly increasing short-term inflation expectations, though it remains committed not to altering its interest rate path in the medium term-a point that was positively received by investors.
In contrast, the US data proved somewhat ambivalent, according to Lipkow. While initial claims for unemployment benefits were lower than expected (189,000 versus the anticipated 213,000), indicating a stable American labor market, concerns remain. The PCE price index stood at 4.3 percent, higher than the anticipated four percent, and first-quarter US economic growth was only 2 percent, below the expected 2.3 percent. Lipkow concluded that this overall development does not establish a trend but warrants close observation, as it brings the potential for stagflationary conditions back into focus for the US.
In Frankfurt, Deutsche Post shares were the top performer near the close, followed by Brenntag and Bayer. The laggard was Münchner Rück.
In commodity markets, gas prices fell; a megawatt-hour (MWh) of gas for delivery in May cost 46 euros, a two percent drop from the day before. This implies a consumer price of at least nine to eleven cents per kilowatt-hour (kWh), including ancillary costs and taxes, should the price level remain stable.
Oil prices dropped sharply: A barrel of Brent crude by the afternoon of Thursday cost $114.40, representing a decrease of 3.1 percent or 365 cents from the previous day’s close.
Currency markets saw the Euro strengthen on Thursday afternoon, trading at $1.1728 per Euro, meaning the Dollar was available for 0.8527 Euros.
