The DAX recorded a loss on Tuesday, closing on Xetra at 24,894 points, which marked a 1.0 percent decline compared to the previous day’s close. Although the index managed to recover some of its earlier losses from a weak start, the broader technical outlook deteriorated due to a rebound near the 25,000 mark.
Andreas Lipkow, Chief Market Analyst at CMC Markets, pointed out that the primary disappointments were fundamental. He cited the weak quarterly figures released by the chemical wholesaler Brenntag and underperforming German purchasing manager indices. According to Lipkow, the path to a recovery in the German economy still seems distant for most investors.
Looking at global risk factors, Lipkow explained that any potential easing in the Middle East conflict is already incorporated into current market prices, negating it as a positive catalyst. However, he stressed the high risk that even a minor incident during the agreed 60-day negotiation period could trigger a new escalation, describing the overall situation as “a powder keg with a very short fuse.”
Sentiment was further weighed down by visible declines in technology stocks. The analyst noted that SpaceX alone has recently shed 35 percent of its value, effectively wiping out approximately $600 billion. This drop has renewed doubts about the current valuations of many semiconductor and tech companies, which will be decided by Micron Technology’s upcoming US market quarterly results.
Near the close of trading, Airbus and SAP led the stock list, while Hochtief, Vonovia, Siemens Energy, and Infineon finished at the bottom.
In other market movements, the price of gas saw a slight increase, with a Megawatt-hour (MWh) slated for July supply costing 42 Euros. If this level holds, the minimum consumer price is estimated to be between nine and eleven cents per kilowatt-hour (kWh), including taxes and ancillary costs. Conversely, the price of oil fell; the North Sea Brent crude barrel cost $77.14 on Tuesday afternoon (5 PM CET), a decrease of 1.0 percent (76 cents) from the prior day’s close.
The European currency weakened in the afternoon; the Euro traded at $1.1382 per dollar, while the dollar was priced at 0.8786 Euros.
