The DAX started the trading day weakly on Thursday morning. At around 9:45 AM, the leading index was calculated at roughly 24,893 points, representing a drop of 0.8 percent compared to the previous closing level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that investors are continuing to take profits in the stock market following the US central bank’s meeting minutes, which intensified concerns about persistently restrictive monetary policy. The Fed appears to be taking inflation risks more seriously than some investors had hoped. Even the strong demand during the latest US Treasury bond auction could only temporarily curb the rise in yields.
Furthermore, the momentum of the robust technology rally is waning. According to the market analyst, even Samsung Electronics’ strong quarterly figures failed to trigger follow-on buying in semiconductor stocks. Instead, investors utilized the positive news as an opportunity to take profits. Lipkow stated that if even convincing company results no longer lead to rising stock prices, this serves as a warning signal for the entire stock rally.
He also points out that the war in Iran and high energy prices remain significant weighing factors. These issues fuel inflation, increase pressure on central banks, and drive up funding costs. Consequently, the balance of power between stocks and bonds is gradually shifting. As bond market yields become more attractive, stocks must justify their high valuations even more strongly.
The market analyst concludes that the stock exchanges are losing their previous tailwind in several areas. He suggests that unless there is a relaxation in energy prices or bond yields, the willingness for major stock purchases is likely to remain limited.
Meanwhile, the European common currency weakened slightly on Thursday morning. The Euro traded at $1.1192 per US dollar, while the dollar was priced at €0.8935 per Euro.
Conversely, the price of gold benefited from the morning trading, reaching $4,120 per fine ounce (+0.2 percent). This equates to a price of €118.36 per gram.
The price of oil notably climbed, with a barrel of North Sea Brent crude costing $103.80 around 9 AM German time on Thursday-a 3.6 percent increase from the previous day’s closing.
