The DAX experienced a decline at the start of the week. By the close of trading on Xetra, the index stood at 26,258 points, marking a decrease of 1.2 percent compared to the previous trading day.
In terms of stock performance, several companies were in the losing category, including Siemens Energy, Rheinmetall, and Vonovia. Conversely, the top performers included Continental, Zalando, and Brenntag.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that the combination of slightly rising oil prices and the increased probability of the Fed hiking interest rates in the coming weeks has somewhat derailed the DAX’s recent record run. Despite this, he highlighted positive aspects, stating that trading volume has increased recently alongside rising prices, underscoring investors’ willingness to buy. While the current day proved weaker, it was not accompanied by rising volume, allowing the recent price movements to be viewed as healthy consolidation.
From an economic perspective, investors in Frankfurt are closely scrutinizing the situation in the Middle East and its spillover effects on energy prices. Lipkow pointed out that the increase in German consumer prices in August registered slightly below expectations, both month-over-month and year-over-year, suggesting a further easing in price pressures. Although inflation remains above the European Central Bank’s 2 percent target, the relatively stable trend is noteworthy, especially given the constant price spikes in the energy market, suggesting the market impact might be limited or effectively absorbed.
Overall, market sentiment at the start of the week was characterized by caution. However, despite the drop at the close, there is no sign of major selling pressure. On the contrary, selective buyers continued to appear in cyclical sectors even on Monday. Lipkow believes that the thesis for a recovery in the German economy remains valid, and this weakness is being exploited by investors to increase their positions. That said, the market is becoming more cautious regarding AI stocks and their suppliers, as last week’s rally is now triggering profit-taking in that specific sector.
In global markets, the Euro strengthened on Monday afternoon, trading at $1.1617 per dollar. Gold prices softened, falling by 0.6 percent in the afternoon trade, settling at $4,430 per fine ounce, equivalent to 122.59 Euros per gram.
Oil, however, saw a strong surge. At around 5 p.m. German time on Monday, a barrel of Brent crude from the North Sea cost $90.53, an increase of 2.8 percent over the previous day’s close.
