Recession concerns caused the week to end in deep red on Friday worldwide and also on the German stock market. The leading index Dax ended the weekend down 1.97 percent to 12,284.19 points, after having previously fallen to its lowest level since November 2020 at just under 12,181 points.
Recession concerns caused the week to end in deep red on Friday worldwide and also on the German stock market. The leading index Dax ended the weekend down 1.97 percent to 12,284.19 points, after having previously fallen to its lowest level since November 2020 at just under 12,181 points.
Investors are still reeling from the recent accumulation of interest rate hikes by large central banks. On a weekly basis, the leading German index increased the losses to more than three and a half percent. Since the turn of the year, the minus has now amounted to more than a fifth.
The MDax of the medium-sized stock market stocks also sounded out new lows on Friday. In the course of trading, it fell to its lowest level since May 2020 and was down 3.12 percent at 22,541.58 points at the end of the day.
Surprisingly high inflation data from the United States had abruptly slowed down the Dax recovery in the previous week. They reinforced the US Federal Reserve’s restrictive monetary policy, which it continued this week with the third major rate hike in a row. Investors are now increasingly worried about a recession as a result of the fight against high inflation. The harbingers of an economic setback are also increasing in the euro zone.
Market observer Andreas Lipkow saw this recession scenario strengthened before the weekend by the latest purchasing managers’ indices, which pointed to a weakening. “Not only is there a hard time with rising returns, but at the same time the economic environment in Europe is becoming increasingly dark,” the stockbroker described the situation. For the Dax, Lipkow sees “all dams broken” and a continued decline in the coming week towards 12,000 points is to be feared.
On the corporate side, too, investors continue to feel the effects of the economic headwind. The battery manufacturer Varta suspended its targets for the third quarter and the year as a whole due to further increases in energy prices. The shares listed in the MDax collapsed by 34 percent.
The financial service provider Hypoport, which also conceded its annual targets, caused an even sharper price slump. The papers closed around 46 percent lower. Analyst Simon Keller from Hauck Aufhäuser Investment Banking called the news “devastating”. The decline in home loans appears to be accelerating as interest rates rise.
The forklift manufacturer Jungheinrich, on the other hand, surprised investors with an increased forecast. The company announced that the robust business development continued in the third quarter. Investors were particularly pleased after competitor Kion had recently shocked them with a profit warning. The Jungheinrich shares ended the day after an initially clear jump in price with a plus of three and a half percent at the top of the MDax.
After a buy recommendation from the US bank JPMorgan, the shares of the flavor and fragrance manufacturer Symrise took the lead in the Dax with a plus of 2.3 percent. In contrast, the economically sensitive car manufacturers and suppliers were among the biggest losers, in line with the trend in Europe. Continental was hit the hardest with a minus of more than nine percent on the last Dax place.
In Europe, too, the indices slipped to levels not seen for a long time. The Eurozone leading index EuroStoxx 50 reached a low for almost two years and closed with minus 2.29 percent to 3348.60 points. The week also ended with large discounts on the stock exchanges in Paris and London. In New York, the leading index Dow Jones Industrial slipped to a low since the end of 2020, and at the end of trading in Europe it was down more than two percent.
The euro came under renewed pressure, falling to another 20-year low. The common currency last cost $ 0.9716 in evening trade. The European Central Bank (ECB) had previously set the reference rate at 0.9754 (Thursday: 0.9884) dollars. The dollar had thus cost 1.0252 (1.0117) euros.
On the bond market, the Rex bond index fell by 0.59 percent to 129.12 points. The current yield rose to 1.91 percent from 1.80 percent the previous day. The Bund future fell by 0.41 percent to 139.67 points.
Source: Stern
