For weeks, hopes of interest rate cuts drove up share prices, but in recent days doubts have grown – which has not left the stock market unscathed.
The DAX has barely changed at the end of a weak week. The German leading index closed 0.01 percent higher on Friday at 18,497.94 points. Some market participants are now doubting the long-held and hoped-for interest rate cuts in the eurozone and especially in the USA.
On a weekly basis, the DAX is down 1.05 percent. However, May was a good month with a gain of 3.16 percent. Despite the leading index’s recent setback from its record high of 18,892 points, the old stock market rule “Sell in May and go away” has not proven successful.
The MDax of medium-sized stocks has a similar weekly and monthly balance. On Friday it lost 0.33 percent to 26,716.80 points.
On Thursday next week, attention will be focused on monetary policy decisions and statements from the European Central Bank (ECB). Experts expect a first cut in key interest rates after a long period of tight monetary policy in the fight against high inflation, although inflation in the eurozone rose more than expected in May.
Overall, the latest data on consumer price developments in the eurozone remain consistent with a gradual decline in inflation into the range of the ECB’s stability target, wrote chief economist Christian Lips of Landesbank NordLB. The European Central Bank is aiming for an inflation rate of two percent in the medium term.
In the DAX, Deutsche Bank shares were among the biggest losers, falling 1.3 percent. The bank is expecting a surprisingly weaker result in bond and currency trading in the current quarter. Commerzbank shares lost 1.1 percent.
Siemens Energy lost 4.7 percent at the end of the DAX, after gaining in early trading. The electrical engineering group’s share price has more than doubled since the beginning of the year. Investors are taking profits here every now and then.
The Eurozone’s leading index, the EuroStoxx 50, rose by 0.03 percent to 4,983.67 points. The French Cac 40 and especially the British FTSE 100 recorded somewhat more significant gains. In New York, the Dow Jones Industrial was up 0.2 percent at the end of European trading.
The euro rose on the foreign exchange market. The European Central Bank set the reference rate at 1.0852 (Thursday: 1.0815) US dollars. The dollar therefore cost 0.9214 (0.9246) euros.
On the bond market, the yield on bonds rose from 2.72 percent the day before to 2.75 percent. The Rex bond index fell by 0.25 percent to 123.12 points. The Bund future rose by 0.03 percent to 129.30 points.
Source: Stern
