The DAX opened lower in trading on Friday. Around 9:30 a.m., the leading index was calculated at approximately 24,265 points, marking a drop of 0.8 percent from the previous day’s closing level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, attributed this dip to reviving uncertainty concerning the Middle East conflict and general profit-taking movements. “Yesterday, the DAX managed to stay above the 24,400 point mark even during very thin holiday trading, but today it is being pulled down by increasing uncertainty about the Middle East conflict and profit-taking” he explained.
Profit-taking also affected markets in Asia, particularly in technology and semiconductor stocks where investors sold portions of their holdings. Lipkow noted that concerns are mounting over two fronts: first, the inflationary problem is becoming clearer, and second, talks between China and the United States regarding imports of critical AI-enabled semiconductors are not proceeding as expected. Investors now fear that the initially constructive mood between the two political figures could change concerning pending issues.
Furthermore, in Japan, producer prices were higher than anticipated, mirroring a similar pattern seen in Europe and the US. Investors, according to Lipkow, had somewhat overlooked the topic of rising prices and are now being reminded of it by stark facts. He cautioned that moving toward the weekend, investors are likely to adopt a more defensive posture while continuing to take profits. Historically, geopolitical situations have altered over weekends, often setting the stage for significant declines on the following Monday.
For the current trading day, Lipkow highlighted that the Empire-State Index and the US industrial production data will be of particular interest.
On the currency front, the European common currency was weaker by Friday morning: one euro cost $1.1642, meaning that one dollar was exchanged for 0.8590 euro.
The price of gold experienced a noticeable dip, dropping to $4,582 per fine ounce that morning, representing a 1.5 percent loss. This equated to a price of 126.54 euros per gram. Conversely, oil prices rose significantly. A barrel of Brent crude from the North Sea cost $107.40 at 9 a.m. German time, an increase of 1.6 percent compared to the previous day’s close.
