A Dax that has been strong for a long time was not quite able to maintain its gains on Tuesday. While the leading German index was still up two percent in the early afternoon, at the end of trading there was a plus of 0.53 percent to 12,961.14 points. Reports of warning shots by the Taiwanese military at civilian drones raised concerns in the market that the conflict between China and Taiwan could escalate again. The drones are said to have flown in the direction of China after the shelling. The MDax lost 0.30 percent to 25,393.83 points.
Energy prices affect courses
A number of market participants only rated the price recovery as a “rally in the bear market”, as a brief upward movement in a downward trend that continued to prevail. Since mid-August, when the Dax had come close to the 14,000 point mark, it had recently lost around 1,000 points at a rapid pace. The prospect of a very tight monetary policy by the US central bank and the sharp rise in energy prices had weighed on prices.
Investors continue to have problems with high inflation. In August, the German inflation rate approached the eight percent mark again. “All of this does not bode well for the German economy. Because the sharp rise in consumer prices is eroding the purchasing power of private households,” said Ralph Solveen, economist at Commerzbank.
VW papers attract
A support for the Dax were the automotive stocks and especially those from the VW Group. Investors are counting on good news about the IPO of Porsche AG. While Volkswagen shares rose by 2.3 percent, those of the group holding company Porsche SE were at the top of the Dax with an increase of 4.4 percent. It was the sixth day of profits in a row with an overall increase of a good 12 percent.
Another clear winner on Tuesday was Bayer’s shares, which recovered by 1.6 percent after a price slide at the beginning of the week thanks to a positive analyst comment. Analysts at Exane BNP Paribas upgraded shares of the pharmaceutical and agrochemicals group, which were deemed undervalued, to “Outperform”.
Utilities were worse off, as shown by sales of almost three percent at RWE. In his market letter, Hans Bernecker attested to the ongoing correction in the renewable energy sector, as there is to be a structural reform of the electricity market in Europe – with the aim of depressing energy prices.
Stock market losses across Europe
Stock market losses prevailed throughout Europe, the Eurozone index EuroStoxx 50 lost 0.24 percent. In the USA, the leading US index, the Dow Jones Industrial, was down three-quarters of a percent at the close of the European stock market.
The euro was last quoted at 1.0022 US dollars, just above parity again. The European Central Bank had previously set the reference rate at $1.0034.
On the bond market, the current yield fell from 1.40 percent on the previous day to 1.36 percent. The Rex pension index rose by 0.22 percent to 132.41 points. The Bund future was hardly changed in the evening at 148.39 points.
