The DAX experienced mixed trading on Friday, partially retreating from the initial gains it made in the morning. Despite a strong start, the leading index saw some of its early profits erode as the day progressed. By about 12:30 PM, the index was calculated at approximately 25,680 points, which was 0.4% above the previous day’s closing level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented on the impressive performance, noting that the new high of 25,810 points was significant, particularly given the US holiday. He attributed the recent upward momentum to internal market dynamics that had been building, driven by a stronger focus on cyclical sectors. The surge was fueled by gains in heavyweights, as well as the automotive, chemical, and mechanical engineering sectors.
Investors are currently betting on a broader economic recovery and a quick trend reversal. This optimism is supported by falling inflation expectations and encouraging signals coming from the US job market. Furthermore, there is significant hope that AI technologies will generate positive ripple and secondary effects, helping even traditional “old economy” businesses operate more efficiently.
However, by lunchtime, early signs of fatigue began appearing, bringing the DAX back down to the 25,600-point level. Following the surprisingly strong European purchasing managers’ indices, the initial short-term gains were partially reversed. Lipkow predicted that the market drops were likely over for the weekend, with investors now focusing on the coming week, especially with the Wall Street reopening for trading.
In other financial markets, the European currency strengthened slightly on Friday afternoon. The Euro was trading at $1.1445, while the US Dollar traded at €0.8737.
Commodities also saw movements; the price of gold significantly benefited, increasing by 1.5% in the afternoon to $4,181 per fine ounce, equating to €117.44 per gram. Meanwhile, the oil price saw a slight increase. At around 12:00 PM Central European Time, a barrel of North Sea Brent crude cost $71.85 on Friday afternoon, marking a gain of 5 cents, or 0.1%, compared to the previous day’s close.
