Stock exchange in Frankfurt: Dax drops significantly – energy crisis fuels price slide

With high losses, the Dax fell to its lowest level since March on Thursday. The question marks behind the gas supply in Germany are getting bigger. This uncertainty weighs on the stock market.

In the afternoon, the leading German index lost 2.19 percent to 12,719 points. The low for the year reached at the beginning of March at 12,438 points is therefore not far away.

The Dax is in the so-called bear market. With a loss of almost 20 percent, the results for the first half of the year are sobering. The barometer is also around 22 percent or almost 3600 points below the record high reached in November. The turnaround in interest rates, the war in Ukraine and fears of inflation and recession are weighing on stock markets worldwide.

The MDax for medium-sized stocks fell by 2.60 percent to 25,694 points on Thursday. The Eurozone leading index EuroStoxx 50 lost 2.1 percent.

Positive economic signals from China did not help. Instead, the worsening gas crisis in Germany is increasingly worrying market participants worldwide. Expert Stephen Innes from the asset manager SPI Asset Management wrote that it was no longer just a European problem, but that the whole world was being held hostage by the energy situation in Germany. If the gas emergency is not resolved soon, it is likely to result in a deeper global energy crisis, he warned.

Federal Economics Minister Robert Habeck (Greens) now fears a complete lack of Russian gas supplies through the Baltic Sea gas pipeline Nord Stream. In mid-June, Russia had already severely curtailed deliveries through Nord Stream, citing technical problems.

This is now causing difficulties for the energy supplier Uniper. Its shares fell by around 18 percent after the group dropped its earnings forecasts for the current year due to the restricted gas supplies from Russia and talks to the federal government about stabilization measures. The prices of RWE and Eon also slipped significantly in view of the uncertainty in the energy sector, with a minus of more than five and a half percent in some cases.

Uniper must ask the German taxpayer for a rescue and the warning makes it clear how critical, if not downright dangerous, the current situation is if the Federal Network Agency does not determine and announce the gas shortage soon, said a trader.

With a minus of five percent, SAP set course for its corona low of March 2020 at a good 82 euros. A downgrade from “Outperform” to “Neutral” by the French investment bank Exane BNP Paribas had a negative effect. The investment story of the software group remains complicated, wrote analyst Stefan Slowinski. He sees demand risks because investments in software are likely to be increasingly put to the test. Investors avoided technology stocks as a whole.

The bleak economic outlook weighed heavily on shares in the automotive sector. The industry is already suffering from semiconductor shortages and supply chain problems. An impending recession in the USA and in the euro zone is further clouding the prospects. In the Dax, Volkswagen, Porsche SE and Continental lagged behind with discounts of up to six percent in some cases.

Real estate values ​​are also struggling in view of rising interest rates. Grand City Properties, Adler Group and Aroundtown each lost almost ten percent. However, Aroundtown was traded with a dividend discount.

The euro fell below $1.04. The European Central Bank (ECB) had set the reference rate significantly higher the previous day at $1.0517. On the bond market, the current yield fell from 1.49 percent on the previous day to 1.32 percent. The Rex pension index rose by 0.92 percent to 133.21 points. The Bund future gained 1.20 percent to 148.57 points.