The German DAX continued its decline on Tuesday, slipping further into negative territory despite an already sluggish start to trading. Around 12:30 PM, the leading index was calculated at approximately 26,020 points, which represented a 0.9% drop compared to the previous day’s closing level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, attributed the downturn to falling market readings in the US, which suggest a poor opening in New York, forcing the Dax to adjust and move closer to the 26,000 mark. He noted that the index is being pulled down by what were previously considered stabilizing factors. Specifically, the shares of heavyweight SAP and cyclical auto stocks are being sold off, while companies like Rheinmetall and Airbus are also experiencing losses. These negative movements could not be compensated by the few gainers, such as Merck, Symrise, and utility providers.
Lipkow added that investor sentiment is not fundamentally poor, but rather cautious, leading to an increased creation of market liquidity. The primary driving factors currently impacting the stock market include uncertainties in the Middle East, inflationary expectations, fears surrounding interest rates, and rising bond yields. He pointed out that recent weeks have clearly demonstrated how rapidly market developments can reverse and lead to quick counter-movements. Furthermore, he commented that trends are becoming shorter-lived, a phenomenon characteristic of the summer slowdown, which appears to be amplified this year.
In other market developments, the European common currency showed weakness by midday, trading at 1.1593 US dollars per euro, meaning the dollar was valued at 0.8626 euros. Separately, the price of Brent North Sea oil increased; around noon Central European Time, a barrel traded at $92.22, which is 1.9% higher than the previous day’s close.
