The German stock index, Dax, remained in positive territory on Friday, continuing an already favorable start to the trading day. Around 12:40 PM, the leading index was calculated at approximately 25,037 points, marking a gain of 0.9 percent compared to the previous trading day.
At midday, Zalando, SAP, and Heidelberg Materials topped the list of performing stocks; by the end of the day, Deutsche Telekom, Rheinmetall, and BASF finished in the lead.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that investors appear increasingly focused on German shares, as they do not currently view the lower returns of German government bonds relative to international peers as an immediate threat to the stock market. He mentioned that the current domestic yield stands at 3.47 percent, significantly below rates seen in the UK and the US. However, he added that discussions regarding rising bond yields are continually reignited by high energy prices and the resulting inflation risks.
Currently, the effects of inflation on consumer prices have been relatively contained because many companies have not fully passed on increased input costs to the final buyer. Yet, Lipkow warned that this situation could change in the coming year. To achieve further profit growth and stabilize their margins, companies might increasingly be forced to pass on higher costs through corresponding price adjustments.
Despite the general market positivity, the shares of Dax heavyweight Deutsche Telekom faced selling pressure on Friday. This pressure is attributed to the plans of tech giant SpaceX to expand its activities in the telecommunications and cable sector. Lipkow reported that the stocks of major US cable and telecommunication companies had already come under significant pressure following this development on Thursday.
In other market movements, the European community currency strengthened slightly on Friday afternoon. The euro was valued at 1.1215 US dollars, and consequently, the US dollar was worth 0.8917 euros.
Gold prices saw a significant increase, hitting $4,186 per troy ounce by the afternoon (+1.4 percent), which translates to 120.00 euros per gram. Conversely, the oil price dropped substantially. The price for a barrel of North Sea Brent crude was $102.90 around noon German time on Friday, marking a decrease of 1.3 percent or 137 cents compared to the close of the previous trading day.
