The Dax experienced a downturn on Thursday, closing the day at 25,371 points on Xetra, marking a 1.1% loss compared to the previous day’s close. The highest performing stocks included Qiagen, Merck, and SAP, while Siemens Energy, Infineon, and Hochtief finished at the bottom of the index.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that “it is an uncomfortable period on the stock exchange” and that investor nervousness was intensifying. He observed that many companies are being severely punished by the market, even when falling short of expectations that were already lowered. Lipkow points to disappointments from the French luxury group Hermès burdening an entire sector, adding that even strong quarterly results from companies like SAP are not enough to encourage new capital inflow; instead, investors are seizing the opportunity for profit-taking.
According to Lipkow, investors are rarely swayed toward new stock purchases, even by highly positive quarterly reports. Increasingly, the trend of “selling on good news” is taking hold. Positive company announcements are no longer viewed as an entry signal but rather as an opportunity to lock in gains and manage risk-a warning sign for the overall health of the equity markets.
The persistent high pressure of inflation is a primary source of concern, according to the analyst. Rising energy prices are putting both consumers and central banks under strain. Consumers have less money available for further discretionary spending at the end of the month, while monetary authorities face increasing pressure to act early to counteract inflation. This situation presents companies with a double burden: financing costs remain high or continue to rise, while simultaneously, demand for goods and services is softening.
This development is particularly worrying because the full impact of high energy prices will take time to filter through the entire economy. Consumers are responding with increased caution in purchasing, companies must tighten their cost management, and central banks are losing the room for loose monetary policy. Lipkow warned that what could originate from an energy price shock is increasingly turning into a tangible growth problem.
The European common currency weakened on Thursday afternoon, with one Euro costing $1.1201, meaning the dollar was priced at 0.8928 Euro. Meanwhile, oil prices edged up, with a barrel of Brent crude (North Sea) trading at $111.00 around 5 PM German time, a 2.0% increase from the close of the previous trading day.
