The German index (Dax) opened the trading day on Thursday with minimal change. Around 9:30 a.m., the benchmark index was calculated at approximately 25,835 points, placing it fractionally below the closing level of the previous trading day. Lead stocks included Deutsche Telekom, Münchener Rück, and SAP, while Daimler Truck, MTU, and Scout24 finished strong.
Jochen Stanzl, chief market analyst at Consorsbank, commented that “friction is emerging from the tension between double-digit company profit growth and yield increases driven by inflation.” Despite this, losses in stock prices remained manageable. He noted that the rise in German 30-year yields to over 3.8 percent was not disrupting the market. Currently, investors are tentatively assuming that profit-taking in the Dax, which occurred following a new record high, is largely over.
Stanzl added that investors have adjusted to the reality presented by the recently concluded reporting season: “Geopolitical tensions, inflation risks, and rising energy prices have not derailed the double-digit growth in corporate earnings over the last three months, and they do not expect this to happen now either.” Whether this conviction will attract new buyers who seek discounted entry points remains to be seen.
According to the analyst, the Dax is currently establishing a higher trading range. This range, which is around 800 points higher than before, has been in place for over four weeks. The 25,800-point level serves as a potential technical support floor. However, if the Dax drops below this level, there is a downside risk of approximately 1,000 points until the next trading range is reached.
In related markets, the European common currency showed some strength on Thursday morning; the Euro traded at $1.1609, meaning the dollar was available for about 0.8614 Euros. Conversely, oil prices declined. At 9 a.m. local time, a barrel of Brent crude oil cost $94.55, which was 1.1 percent-or 108 cents-less than the closing price of the previous trading session.
