The DAX index experienced a significant decline on Tuesday, closing the trading session at 22,922 points, marking a 1.1 percent decrease from the previous day’s close. Although the index managed to turn positive during the morning trading hours, it retreated back into negative territory by the afternoon.
Market analyst Andreas Lipkow of CMC Markets indicated that the ultimatum set for Iran, which expires at 2 a.m. in the analyst’s time zone, remains the dominant topic influencing the stock market. Lipkow commented that the phrasing used by US President Trump suggests there will likely be a major military action against Iran once the deadline passes.
According to Lipkow, the rhetoric has recently intensified, reinforcing investor fears of further escalation, possibly involving the deployment of US ground troops inside Iran. Furthermore, Iran continues to issue counter-demands and is facing increasing global economic pressure due to disruptions in supply and logistics chains. Adding to the tension, Tehran has announced the cessation of all dialogue channels. Earlier in the day, rumors concerning a possible extension of the deadline and negotiations involving five allied nations and eight intelligence agencies had temporarily brightened the mood on the trading floor, pushing the DAX into positive territory, the analyst explained.
Additionally, European purchasing manager indices released today reflect heightened uncertainty and climbing energy prices. Lipkow observed that most reported data points were slightly below expected levels, noting that the purchasing manager index for Italy had actually fallen below the 50 mark.
Leading up to the close, the majority of DAX stocks traded in the negative. Heidelberg Materials stocks were the biggest loser by a clear margin. In contrast, shares of BASF and Brenntag led the gains.
Meanwhile, the price of gas increased. A megawatt-hour (MWh) of gas for May delivery cost 53 Euros, an increase of five percent from the previous day. If this price level remains stable, it implies a consumer cost of at least around ten to twelve cents per kilowatt-hour (kWh), including ancillary costs and taxes.
Oil prices also rose notably. A barrel of Brent crude oil in the North Sea cost $110.90 on Tuesday afternoon around 5 p.m. German time, representing a 1.0 percent increase compared to the close of the previous trading day.
The European common currency strengthened during the afternoon session. The Euro traded at $1.1574, meaning the dollar was priced at 0.8640 Euros.
