The DAX declined on Tuesday. At the close of Xetra trading, the index was recorded at 25,185 points, representing a drop of 0.8 percent compared to the previous day’s close. Following a weak start in the morning, the DAX continued to fall and remained at this level throughout the session.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that following the significant jump by the DAX over the 25,000 point mark on Pentecost Monday, investors adopted a more cautious approach toward German standard stocks today and took some of the day’s previous gains.
Lipkow further explained that the situation in the Middle East remains fragile, influencing oil prices and subsequently affecting trading activity on European exchanges. He noted that the critical $100 mark for the North Sea Brent crude could determine the direction of stock prices in the coming days and weeks. Listings above that level signal continued inflationary risks, while sustainable prices below it could initiate a relaxation in the overall price development of goods and services.
Currently, the primary dampener is a waning consumer sentiment in both Europe and the United States, exacerbated by inflationary trends, Lipkow added. However, he pointed out that the latest US data, which was released slightly better than expected in the afternoon, lifted the New York indices higher. Despite this, he warned that early signs of fatigue might soon appear on Wall Street following the rapid record-breaking run, as the threat of a summer slowdown begins to loom larger in investors’ minds.
In Frankfurt, Zalando shares topped the performance list towards the end of trading, while stocks from Scout 24, SAP, and MTU finished at the bottom of the list.
Simultaneously, gas prices increased. A megawatt-hour (MWh) of gas delivered in June cost 47 Euros, which is four percent higher than the previous day. If this price level remains constant, this implies a consumer price of at least around nine to twelve cents per kilowatt-hour (kWh), including overheads and taxes.
Oil prices saw a sharp rise. A barrel of North Sea Brent crude cost $100.30 on Tuesday afternoon around 5 p.m. German time, an increase of 4.3 percent from the close of the previous trading day.
The common European currency was slightly weaker on Tuesday afternoon: the Euro was priced at $1.1620, meaning the Dollar was offered at 0.8606 Euros.
