The German DAX index opened positively on Thursday morning. By 9:30 AM, the leading index had reached approximately 24,990 points, marking a 0.3% gain over the previous day’s closing level.
Jochen Stanzl, Chief Market Analyst at Consorsbank, commented that DAX investors were waiting for concrete signals regarding an end to the Middle East conflict. With these signals appearing, strong buying activity has emerged. He noted that corporate earnings reports are demonstrating expected resilience despite high energy prices, suggesting a strong chance for the index to break out of its year-long sideways pattern.
Stanzl further pointed out an interesting trend in fixed income assets: Since the start of the year, demand for Eurozone government bonds has been increasing, while demand for US Treasuries has stagnated. This suggests solid, consistent interest from international investors in Euro-denominated assets. According to Stanzl, the shift in investment rotation from US stocks to European equities was likely merely paused, rather than permanently halted, by the Middle East conflict.
While US and certain Asian indices are currently elevated due to AI-driven companies, the cyclical nature of the DAX could now take full effect if the Middle East conflict resolves and oil and gas prices decline. Stanzl believes this could signal a revival of the traditional industrial economy. The recent momentum in the DAX, he concluded, shows a clear appetite among investors to aim for an all-time high.
He emphasized that global equity markets are currently driven by investments in defense and artificial intelligence. If the Middle East conflict is resolved swiftly, both these major engines can return to full operational capacity, leading to a positive outlook for stocks.
In related market movements, the European currency showed strength, trading at 1 Euro = 1.1766 US Dollars, or conversely, 1 US Dollar = 0.8499 Euros.
Gold prices benefited significantly; a fine ounce was trading at $4,743 in the morning, a climb of 1.1%. This converts to a price of €129.60 per gram.
Meanwhile, oil prices dropped sharply. At 9 AM, a barrel of North Sea Brent crude cost $98.33-a figure 10.5% lower than the previous day’s close.
