Once again disappointing economic data from China weighed on the Dax somewhat on Tuesday. The leading German index fell 0.44 percent to 15,754.98 points, extending its recent losses. The MDax for medium-sized stocks fell by 0.45 percent to 27,728.09 points. The Eurozone barometer EuroStoxx lost 0.57 percent.
Once again disappointing economic data from China weighed on the Dax somewhat on Tuesday. The leading German index fell 0.44 percent to 15,754.98 points, extending its recent losses. The MDax for medium-sized stocks fell by 0.45 percent to 27,728.09 points. The Eurozone barometer EuroStoxx lost 0.57 percent.
The Chinese economy continues to develop weakly. In August, the mood barometer for service providers determined by the business magazine Caixin fell significantly. The key figure fell by 2.3 points to 51.8 points compared to the previous month. On average, analysts had expected a much more moderate downturn. At just over 50 points, the index is still signaling growth.
Nonetheless, investors feared that the previously strong service sector could now also weaken in Europe, wrote market analyst Jochen Stanzl from the trading company CMC Markets. The industry has been strong recently and has partially compensated for the weakness in the industry.
In this environment, the economically sensitive bank stocks were among the biggest losers across Europe. They also suffered from the prospect of interest rates probably not rising any further for the time being after the Australian central bank left interest rates unchanged. High interest rates increase banks’ income, and interest income from lending and money market transactions, for example, is then more lavish.
The Reserve Bank of Australia’s decision not to raise interest rates could mean the start of a hibernation for central banks’ monetary policy, continued Stanzl. “The European Central Bank could also take a break next week, as could the American one the following week,” said the expert. According to Stanzl, there are increasing signs of a weakening of the economy, while inflation has moved far away from its peak.
At the end of the Dax, Commerzbank shares fell by 4.7 percent and were also weighed down by a negative analyst comment. The expert Amit Goel from the British investment bank Barclays sees considerable risks for the profit expectations of the market. For example, net interest income in the core business is likely to fall in 2024, also because key interest rates have now stabilized after their sharp rise.
Deutsche Bank’s shares were the second weakest in Germany’s leading index, down 2.7 percent. The fact that the Federal Financial Supervisory Authority (Bafin) is increasing the pressure on the parent company in view of the many complaints from Postbank customers also weighed on the mood.
Since the turn of the year 2022/23, the Bafin has observed “considerable impairments in the processing of customer business at Postbank”, Bafin reprimanded. If the situation does not improve, the supervisors could take action, for example ordering a special audit or appointing a special officer to monitor whether the guidelines set by the supervisor are implemented in a timely manner.
Source: Stern
