The DAX saw a significant increase on Thursday, closing the day at 26,040 points, marking a 1.3 percent gain compared to the previous closing.
Several stocks topped the climb, led by Adidas, which experienced a strong rally of over six percent just before the market closed. Following Adidas were the shares of Deutsche Bank and Rheinmetall. On the other hand, the day brought strong dips for Vonovia, which lost over three percent, followed by SAP and GEA.
Market analyst Andreas Lipkow of CMC Markets attributes this positive momentum to the central banks. He noted that both the US Federal Reserve and the European Central Bank (ECB) kept their key interest rates unchanged and adopted a more cautious tone in their communications. He suggested that the fear of further monetary tightening had, at least in the short term, dissipated. The analyst added that this relief is palpable, as the combination of high energy costs, persistent inflation, and additional rate hikes could have greatly strained an already fragile economy.
Further attention focused on the ECB today due to the unexpected announcement regarding the early departure of its President, Christine Lagarde. According to Lipkow, this shifts the focus beyond just interest rate policies to the critical question of her successor. He emphasized that the appointment to this key position could define the Eurozone’s monetary policy direction for years to come and will be under intense scrutiny by financial markets.
Overall, the ongoing quarterly earnings season has provided largely positive signals so far. Lipkow maintained that minor disappointments are being absorbed by investors with relative calm, barely affecting the generally upbeat market mood. He believes that the relief surrounding economic conditions proving less problematic than previously feared is outweighing any negative news.
However, the market is facing a significant test ahead. He pointed out that tonight, two more heavyweights of the US tech sector, Amazon and Intel, are releasing their quarterly results. Their findings, particularly their outlook for the months ahead, have the potential to trigger substantial price movements, especially following the recent recovery.
On currency markets, the Euro strengthened slightly on Thursday afternoon, trading at 1.1164 US dollars, meaning the dollar was priced at 0.8957 euros.
Commodity movements showed mixed results. The price of refined gold weakened, falling 0.9 percent in the afternoon, reaching $4,014 per troy ounce, equivalent to 115.60 euros per gram. Conversely, the oil price declined sharply. At approximately 5 p.m. Central European Time on Thursday, a barrel of Brent North Sea crude cost $113.70, which was 1.4 percent (or 158 cents) less than the previous day’s close.
