Fears about the gas supply and the weakening economy brought significant losses to the German stock market on Thursday.
Fears about the gas supply and the weakening economy brought significant losses to the German stock market on Thursday.
The Dax slipped 1.76 percent to 12,912.59 points, its lowest level since early March. The MDax fell by 2.74 percent to 26,499.68 points. Even moderate price gains on the US stock exchanges did not provide any tailwind.
In Europe, sentiment data from companies in the euro region weighed on investors’ mood on Thursday. The S&P Global purchasing managers’ index fell in June to its lowest level in almost a year and a half and also more than analysts had expected.
“The numbers are disappointing across the board and the unfavorable framework conditions from high prices, especially for raw materials and preliminary products, as well as supply bottlenecks, a lack of staff and rising interest rates cloud the prospects more clearly than before,” commented analyst Ralf Runde from Helaba. The day before, Fed chair Jerome Powell had not ruled out a recession in the USA.
With a view to the individual stocks, banks in particular were under pressure. As the weakest Dax value, Deutsche Bank lost a whopping 12.2 percent and dropped to its lowest level since the beginning of March. In the MDax, Commerzbank papers slipped by 11.8 percent. The industry is concerned that people and businesses will struggle to repay loans in the event of a recession. Financial institutions also performed worst on the European stage.
Utilities, on the other hand, took a top spot, from which RWE benefited on the German market. Papers from the energy group increased by 0.6 percent in the weak Dax. RWE is seen as a beneficiary of the energy crisis because the group focuses on renewable energies and keeps lignite-fired power plants on standby for emergencies.
On the other hand, things went badly for the power plant operator Uniper, Germany’s largest importer of Russian gas. Its papers fell by 6.3 percent as a result of the gas alert level declared by the federal government.
Not only energy is scarce, but also food. The debate on the topic of biofuel is not letting investors go at this time: Verbio’s papers hit it hard with a slump of almost 20 percent after a media report that several countries within the G7 group are pushing for regulations on temporary use to renounce.
Otherwise, the main focus was on analyst assessments – and they related to second- and third-tier companies. Aroundtown was downgraded to “underweight” by JPMorgan, which weighed on the share by 6.6 percent. Analyst Richard Schramm from the British bank HSBC was now more cautious about the 5.6 percent lighter Rheinmetall shares after a strong run.
On the European floor, the EuroStoxx 50 lost 0.8 percent to 3436.29 points. The leading indices in Paris and London also suffered losses of up to one percent. In New York, the Dow Jones Industrial was just down in the late afternoon.
The euro last cost 1.0508 US dollars. The European Central Bank had set the reference rate at 1.0493 (Wednesday: 1.0521) dollars.
Prices of German Bunds rose significantly on Thursday. In contrast, the current yield fell to 1.36 percent from 1.60 percent the previous day. The Rex bond index rose 1.16 percent to 133.05 points, while the Bund future rose 1.19 percent to 145.08 points.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
