In view of renewed disappointing economic data from China, investors in the German stock market have held back. In addition, there was a gloomy corporate mood in the euro region and weak order data for US industry. The leading index Dax ended the day without too much fluctuation with a discount of 0.34 percent to 15,771.71 points.
In view of renewed disappointing economic data from China, investors in the German stock market have held back. In addition, there was a gloomy corporate mood in the euro region and weak order data for US industry. The leading index Dax ended the day without too much fluctuation with a discount of 0.34 percent to 15,771.71 points.
The MDax for medium-sized stocks fell by 0.67 percent to 27,666.59 points. The situation was similar across Europe: The EuroStoxx 50 ended trading 0.25 percent weaker at 4269.16 points and thus posted the fifth day of losses in a row. The country stock exchanges in Paris and London also fell moderately on Tuesday.
Corporate mood gloomy
In August, corporate sentiment in the euro area, as determined by the S&P Global Purchasing Managers’ Index, deteriorated somewhat further and is now as bad as it was at the end of 2020 during the corona pandemic. In China, service sector data disappointed in August, suggesting continued weakness in the domestic economy. In Germany, investors now fear that the hitherto strong service sector could also weaken in Europe, which the data from S&P Global seem to confirm. Most recently, Europe’s service sector had presented itself strongly and was able to partially compensate for the weakness in industry.
In detail, the development turned out to be double-edged. While the mood in industry brightened from a low level, it clouded over in the service sector, which had been stable for a long time. The service sector has developed into a brake pad, commented chief economist Cyrus de la Rubia from S&P partner Hamburg Commercial Bank. At the same time, the manufacturing industry has probably not yet bottomed out.
Commerzbank brings up the rear in the Dax
At the bottom of the Dax were the Commerzbank shares, which fell by 6.1 percent. Above all, a negative analyst comment burdened. The sharp rise in key interest rates has so far helped the financial institution to become more profitable and to significantly expand the scope for distributions to shareholders, wrote analyst Amit Goel from the British investment bank Barclays. In the meantime, however, the risks are increasing, and the interest surplus could disappoint investors in the future.
Deutsche Bank shares lost 3.0 percent. The Federal Financial Supervisory Authority (Bafin) increased the pressure on the parent company in the face of massive complaints from Postbank customers. Since the turn of the year 2022/23, she has observed “considerable impairments in the processing of customer business at Postbank,” Bafin complained.
A skeptical study by the major British bank HSBC, which addressed FMC’s continued difficult business environment, weighed on the shares of the dialysis specialist. They were the bottom of the MDax by 4.4 percent. In the US, for example, the rise in reimbursements for dialysis treatments is unlikely to be enough to offset the rise in costs due to inflation, wrote analyst Sezgi Oezener. Therefore, dialysis providers would find it difficult to increase their profitability.
Speculation about interest rate pause by the ECB
Speculation about an interest rate pause by the European Central Bank (ECB) weighed on the euro. The common currency was last listed at 1.0730 US dollars. The ECB, which will decide on interest rates next week, had previously set the reference rate at 1.0731 (Monday: 1.0801) dollars. The dollar thus cost 0.9318 (0.9258) euros. In bond trading, the current yield rose from 2.58 percent on the previous day to 2.61 percent. The Rex pension index fell by 0.18 percent to 124.12 points. The Bund future recently lost 0.27 percent to 131.51 points.
Source: Stern
