Before the eagerly awaited interest rate decision by the US Federal Reserve, the Dax dropped to a three-month low on Wednesday. The fact that Russia ordered a partial mobilization of its own armed forces also caused uncertainty. The leading German index initially fell by more than one percent. At 12,520 points, it reached a low since July.
The Dax was then able to put the losses into perspective, however, by losing 0.47 percent to 12,610.68 points. He was able to work his way back just above the 12,600 point mark, which recently gave him support on several occasions. The EuroStoxx followed that roughly in step down. Although the MDax fell only slightly by 0.16 percent to 23,721.41 points, it has been at a low since 2020 for days.
According to the CMC Markets expert Jochen Stanzl, the Dax is close to the low for the year, which is just below the 12,400 point mark. If this mark breaks, it does not paint a good picture for the leading index. “These are likely to include numerous sell orders from long-term investors who want to finally pull the ripcord – and from those who entered the market at short notice but have not yet made it into the profit zone,” says Stanzl.
The Fed is expected to raise interest rates again in the middle of the week in the fight against high inflation. Most experts assume that the central bankers will raise the key interest rate by 0.75 percentage points for the third time in a row. However, some market participants also expect more. Traders put the proportion of those who expect a full percentage point at one fifth.
Meanwhile, almost seven months after the start of the war, Russia ordered a partial mobilization of its own armed forces. According to Defense Minister Sergei Shoigu, 300,000 reservists are to be mobilized for the fight against Ukraine. The beneficiaries of such news were once again the shares of German armaments companies: Rheinmetall and Hensoldt were up by up to 8.2 percent.
The issue of the energy crisis with its price-increasing effect also remained in the focus of investors. Germany’s largest gas importer, Uniper, is now being nationalized: As it became apparent the day before, the federal government wants to buy all the shares owned by the previous majority owner, Fortum, for EUR 1.70 each. A capital increase of EUR 8 billion at this price is also planned. The federal government will then own around 98.5 percent of the shares in Uniper.
The move will result in the dilution among Uniper’s existing shareholders, which market participants have already feared. The titles had gone out of trading the day before at EUR 4.18 – and the price collapsed accordingly with major fluctuations. Most recently, the papers leveled off at EUR 3.39 at a discount of 19 percent. In the case of Fortum, on the other hand, investors are very relieved, as a price jump of 15 percent shows.
With 2.6 percent one of the biggest Dax losers were the shares of Deutsche Post. Goldman Sachs analyst Patrick Creuset gave up his previous buy rating on expectations that the logistics sector’s profitability would peak in the third quarter. He now anticipates a multi-year down cycle and a new normal that could be worse than pre-pandemic 2019.
