The DAX maintained a positive trajectory throughout Friday after a strong opening. By 12:30 PM, the benchmark index was calculated at approximately 26,480 points, marking a 0.7% increase from the previous day’s closing level.
SAP led the gainers, benefiting from speculation that financial investor Silver Lake may acquire US software provider Workday. These acquisition rumors contributed generally positive sentiment across the software sector.
Commenting on the market, CMC Markets Chief Market Analyst Andreas Lipkow noted that the situation in the Middle East remains highly strained, forcing investors to adapt to rising energy prices. While recent US producer and consumer pricing data showed no signs of inflation, the figures were recorded during a period when fuel prices were declining.
Lipkow further explained that the US labor market continues to appear robust, though not strained. This stability reduces investor concerns about interest rate increases and grants central banks the flexibility to wait. The market is currently anticipating this, leading to a further drop in the probability of monetary tightening in September. He suggested the market was approaching a “Goldilocks scenario,” but the conflict in the Middle East and its direct impact on energy prices and the global economy require investors to currently accept this unavoidable risk.
In Asia, the surge in technology stocks persists, with indices in Japan and South Korea entering the weekend higher. However, European trading is anticipated to proceed sideways, as momentum is diminishing and few technology-heavy sectors dominate the European major indices. Consequently, Lipkow stated that DAX investors are intensifying their focus on defensive stocks to help maintain the index at a high level. Overall, trading in Frankfurt appears quiet ahead of the weekend and is expected to continue at low volume.
In other markets, the common European currency strengthened on Friday afternoon. The Euro exchanged at $1.1555, allowing the Dollar to trade for €0.8654. Regarding commodities, the price of gold showed little change, settling at $4,352 per troy ounce in the afternoon (unchanged), equating to €121.08 per gram. In contrast, the price of oil saw a slight increase; at about 12 PM Central European Time on Friday, a barrel of Brent crude (North Sea) cost $87.18, representing an increase of 11 cents or 0.1% over the previous day’s close.
