The German market index (Dax) showed little movement on Tuesday. By the close of trading on Xetra, the index stood at 25,399 points, reflecting a modest gain of 0.1 percent compared to the previous day’s close.
The day’s top stock performers included Infineon, which surged by over four percent just before market close, followed by Siemens Energy and Vonovia. In sharp contrast, Fresenius saw a significant decline of over five percent before the close, alongside losses for Bayer and Fresenius Medical Care.
Commenting on the market sentiment, Andreas Lipkow, Chief Market Analyst at CMC Markets, stated that Frankfurt investors continue to place their faith in a sustainable de-escalation of the war in the Middle East. He noted that this hope is reflected in the oil price, with the Brent crude approaching the psychologically important $100 mark. While the market has not yet exited the zone of pain, he noted that the direction appears positive from the perspective of the stock markets.
Lipkow further elaborated that regarding inflation and monetary policy, sustained high energy prices-rather than mere short-term price spikes-are the crucial factor. He concluded that the faster and more sustainably Brent falls back below $100, the less pressure will be exerted on inflation, central banks, and bond markets.
The fragile market balance remains supported by investor hopes for continued growth in the AI sector. As long as investors maintain confidence in the long-term returns and growth potential of the industry, the high valuations remain justifiable. However, a genuine collapse in the AI narrative could trigger a major correction.
In other developments, the European common currency weakened on Tuesday afternoon: the Euro cost 1.1331 US dollars, meaning the dollar was available for 0.8825 Euros.
On the commodity front, the price of gold saw a significant rise, trading at $4,161 per fine ounce in the afternoon, a gain of 1.1 percent, which equates to 118.06 Euros per gram. Conversely, the price of oil dropped considerably; Brent North Sea crude cost $104.20 in the afternoon, representing a decrease of 108 cents, or 1.0 percent, from the previous day’s closing price.
