The DAX began the trading day on Wednesday with slight gains. At around 9:30 a.m., the leading index was calculated at approximately 25,523 points, which was up 0.2 percent from the previous day’s closing level. Leading the list of performers were Deutsche Bank, RWE, and BASF, while the reinsurers Hannover Rück and Münchener Rück recorded declines.
Meanwhile, oil prices rose sharply. A barrel of the North Sea-grade Brent crude cost $87.07 at 9 a.m. Central European Time on Wednesday, marking a 3.5 percent increase from the close of the previous trading session.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that the “fire truce in Iran appears to be over,” suggesting that energy prices were already reacting to new military conflicts involving Iran, Saudi Arabia, and the United States. He noted that media reports indicated multiple attacks on US military bases, leaving the situation in the conflict complex and unclear.
According to Lipkow, investors in Asian markets reacted immediately. While battered technology stocks continued their significant price correction, the negative momentum was further accelerated by the news emanating from the Middle East.
The analyst explained that investors are increasingly distancing themselves from semiconductor stocks due to growing doubts about the sustainability of the AI cycle. He added that continually rising investment sums prompt caution, leading investors to reduce stock positions and take profits from gains made over the past few months. Furthermore, the poor-than-expected annual forecast from South Korean semiconductor manufacturer SK Hynix added fuel to the fire. The shares themselves fell by more than eleven percent by the end of trading, although they dropped nearly 20 percent at their peaks.
Lipkow anticipates that the day’s trading will be dynamic. Beyond the figures from Deutsche Bank, Microsoft and Meta are scheduled to release their financial results and outlooks after US markets close this evening. Additionally, the US Federal Reserve’s interest rate decision is set to draw significant attention. Under these circumstances, the DAX may find it challenging to break past the 25,500-point mark.
In currency market news, the European community currency was slightly stronger in the morning, with the Euro trading at $1.1397, meaning the dollar was available for 0.8774 Euros.
