The DAX climbed into positive territory on Thursday afternoon after a reserved start to trading. Around 12:30 PM, the leading index was calculated at approximately 25,210 points, an increase of 0.7 percent from the previous day’s closing level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that the DAX was benefiting today from the lower weighting of pure technology companies. Although Infineon’s stock is near the end of the index and is being influenced by profit-taking in other semiconductor shares, investors in Frankfurt are also turning to stocks like Bayer. Following a judicial ruling, Bayer is pursuing a new corporate structure to better consolidate its crop protection activities. Automobile manufacturers are also drawing significant interest.
According to Lipkow, investors are currently finding attractive entry points in cyclical industries that had previously been less sought after due to their high dependence on economic cycles. The growing hope for an economic recovery is now driving sector rotation, which is helping bank and financial stocks join the winners list. He added that if the Wall Street trading continues positively in the afternoon, the index could potentially achieve a sustainable jump above the 25,000-point mark today.
Meanwhile, the FTSE 100 is also moving into positive territory, currently trading at 10,530 points. In London, investors are engaging in a ‘bargain hunt,’ finding opportunities particularly in the machinery and retail sectors. Lipkow explained that the expectation of looser monetary policy, suggested by various central bankers, is burdening financial stocks but is simultaneously benefiting classic cyclical industries. The gains seen in numerous index stocks are offsetting the losses in the heavy-weight oil and banking stocks. Furthermore, shares in the telecommunications and pharmaceutical industries are seeing increased demand today.
In currency markets, the European community currency strengthened on Thursday afternoon, with one Euro costing 1.1409 US dollars, and the dollar fetching 0.8765 Euros.
The price of gold managed to increase, rising by 0.9 percent in the afternoon, where a fine ounce was priced at 4,067 US dollars, corresponding to 114.60 Euros per gram.
Conversely, the price of oil dropped significantly. At around 12:00 PM German time on Thursday, a barrel of North Sea Brent crude cost 70.63 US dollars, representing a decrease of 94 cents, or 1.3 percent, compared to the previous day’s close.
