The German DAX began the trading day on Friday morning on a positive note. By 9:40 AM, the leading index was calculated at around 25,557 points, marking a 0.7% increase from the previous day’s closing level.
According to Andreas Lipkow, Chief Market Analyst at CMC Markets, investors are resuming their focus on technology stocks following recent price declines. Low prices seen in the Wall Street and Asian markets have provided opportunities for targeted buying. This rally is also supported by the declining yields of ten-year U.S. government bonds, which have approached the five percent mark again.
However, the analyst cautioned that there is no sign of a fundamental economic relaxation. High energy prices remain a significant drag, exacerbated by the military conflicts in the Middle East and ongoing supply chain disruptions. Furthermore, recently sharp increases in U.S. consumer and producer prices highlight how rapidly energy price shocks can translate into inflation. While bond market relief may offer some easing, the risks associated with inflation remain high.
Lipkow noted that the rebound is unusually reliant on tech-heavy stocks, leaving cyclical industries largely excluded for now. He pointed out that investors are not buying the entire market, but rather targeting sectors that have historically been growth drivers. Nevertheless, he added that a technical counter-movement following such significant losses does not constitute a sustainable trend reversal.
Looking ahead, the trading session toward the end of the week is expected to be relatively calm due to a lack of crucial economic data. The analyst stressed that the key indicators moving forward will be whether the easing in bond yields continues and if the recovery spreads to other sectors. Technically, Lipkow outlined a trading range for the DAX between 25,350 and 25,650 points.
In other markets, the Euro strengthened on Friday morning, trading at $1.1245, while the dollar was valued at 0.8893 Euros. The gold price climbed, hitting $4,189 per fine ounce in the morning, representing a 0.4% increase, which translates to €119.77 per gram. Meanwhile, the price of oil declined. At around 9 AM CET, a barrel of Brent crude was trading at $105.20, which was 0.7% lower than the prior closing price.
