The German stock market suffered the next slide on Wednesday. The previous day’s rebound from the losses at the start of the week proved unsustainable. In view of renewed concerns about the banking sector, the Dax closed 3.27 percent lower at 14,735.26 points and thus fell below the round mark of 15,000 points.
The MDax for medium-sized stocks fell by 3.56 percent to 26,790.72 points. Other major stock indices in Europe and Wall Street also fell significantly.
Credit Suisse is in focus
After the collapse of three US banks and the fear of an expansion to the entire sector, the ailing Credit Suisse came into focus again in the middle of the week. In an interview with Bloomberg TV, the chairman of the Saudi National Bank, Ammar Abdul Wahed Al Khudairy, categorically ruled out additional support on request. The bank is a major shareholder in Credit Suisse, whose shares in Zurich have at times fallen to record lows.
Meanwhile, US economic data have disappointed. “Both the retail sales in the USA and the Empire State Index are lower than feared,” commented market expert Andreas Lipkow and spoke of a “toxic mixture that has now chased away even the last positive stock marketer”. Surprisingly, however, the rise in US producer prices weakened significantly in February, which took further pressure off the US Federal Reserve. Due to the unrest in the banking sector, it is questionable whether the Fed will continue its fight against inflation.
The interest rate decision by the European Central Bank (ECB) is due on Thursday. Analyst Konstantin Oldenburger from the trading house CMC Markets wonders how the ECB communicates its future monetary policy to a financial market “which is under a lot of stress due to the first major bank collapses in the USA since Lehman Brothers.” Oldenburger nevertheless expects a further interest rate hike of 0.50 percentage points.
Commerzbank and Deutsche Bank lose
On the corporate side, the high price losses at Credit Suisse also pushed other bank stocks into the red. The industry index Stoxx Europe 600 Banks fell by 6.9 percent. In Germany, Commerzbank shares slipped by 8.7 percent, Deutsche Bank papers lost 9.3 percent at the end of the Dax. “If a bank coughs, everyone gets hit,” commented analyst Salah-Eddine Bouhmidi from broker IG. However, there is a big difference between the various financial institutions. “Investors should try to separate the wheat from the chaff here.”
Many car and supplier stocks were also weak. The Volkswagen preferences went down 4.1 percent, the group had lowered the margin target for its core brand. The BMW shares, which were still in demand after the annual balance sheet, were also unable to withstand the downward pull, but they only lost around 1 percent. Initially, the Munich carmaker was able to convince investors with a higher margin target and an improved investment ratio.
Weak numbers at fashion retailer H
One of the few positive outliers in the Dax was Eon with an increase of 0.5 percent. A trader explained that the final figures from the energy supplier were even better than hoped for based on the key figures. Above all, he praised the outlook: the targets made “a strong impression” and with the planned expansion of the investment program the group is above the expectations of some analysts.
Lanxess loses double digits
Meanwhile, Lanxess shareholders in the MDax had to cope with double-digit losses of 11.3 percent. The business figures and forecasts of the chemical company were poorly received. Stockbrokers were particularly bothered by the restrained targets for the first quarter and the development of the free flow of funds in the final quarter of 2022.
In the small-cap index SDax, the papers of the biotech company Morphosys, which was recently struggling in the red, continued their downward slide with a price loss of 5.4 percent. After the trading day, the group will present its annual figures.
The EuroStoxx 50, the leading index in the euro zone, closed 3.46 percent lower at 4034.92 points. The French Cac 40 and the British FTSE 100 fell similarly sharply. The New York Dow Jones Industrial lost a good 2 percent at the end of trading in Europe.
Government bonds as safe havens
The euro fell significantly and was last listed at 1.0539 US dollars. The banking turmoil drove investors into safe havens such as government bonds or the dollar. The ECB set the reference rate at 1.0549 (Tuesday: 1.0737) dollars. The dollar thus cost 0.9480 (0.9314) euros.
On the bond market, the current yield fell from 2.38 percent on the previous day to 2.34 percent. The Rex pension index lost 0.41 percent to 125.82 points. The Bund future rose sharply by 2.89 percent to 137.85 points.
