The sell-off of the stock markets in Asia is also dragging the German leading index down. In the DAX, there are almost only losers at the start of the week.
In the face of a sell-off on the Asian stock markets, the DAX is continuing its recent slide. The German leading index fell by 2.1 percent to 17,297.98 points on Monday; at the start of trading it had lost more than 3 percent and reached its lowest level since February. At the same time, the stock market barometer fell below the much-watched 200-day average line, which provides an indication of the longer-term trend.
Crash of 12 percent in Japan
Investors were reacting in particular to the sharp fall in prices on the Asian stock exchanges. In Tokyo, the Nikkei 225 plummeted by 12.4 percent to 31,458.42 points. Because the Japanese leading index has now lost more than 20 percent from its recent record high, stock market traders are talking about a bear market. This means that the stock market there is characterized by a gloomy mood and falling prices. The recent significant rise in the national currency, the yen, has put a heavy burden on the share prices of export-dependent Japanese companies.
Heavy losses were also recorded at other important trading venues in Asia. In Seoul, for example, the leading index Kospi fell by 8.8 percent and in Taipei the Taiex lost 8.4 percent. On a closing price basis, this was the largest daily loss ever seen.
On the Asian stock exchanges, technology stocks suffered from a report that chip producer Nvidia is postponing the launch of new AI chips due to design defects. Nvidia has recently been the driving force of the general stock market rally as a major beneficiary of the booming topic of artificial intelligence (AI).
Concern about the US economy
In addition, investors were scared off by concerns about a possible hard landing of the US economy, as this could also weaken the global economy.
The fear of a recession in the United States is particularly affecting the stocks at the bottom of the stock market. The MDax, which is made up of medium-sized stocks, lost 2.68 percent to 23,808.28 points. The SDax, the small cap index, fell by 3.1 percent. Medium-sized and smaller companies are particularly dependent on the economic cycle.
Europe also saw a sharp decline. The Eurozone’s leading index, the EuroStoxx 50, lost 2.3 percent. It is also expected that US technology stocks could collapse. A look at the VIX fear barometer shows how widespread the uncertainty is in New York. This measures the intensity of fluctuations on the stock exchanges and reached a high since mid-2020 on Monday.
Almost only losers in the Dax
There were almost only losers in the DAX. Only Infineon shares rose, gaining almost one percent. The chip company improved slightly in the third quarter and stopped its downward trend of the previous quarters. At the bottom of the index, shares in the online retailer Zalando fell by 5.6 percent.
United Internet shares suffered a price slump of more than 15 percent at the end of the MDax. The Internet and telecommunications group had slightly lowered its expectations for the year as a whole following the temporary failure of its subsidiary 1&1’s mobile network. Its shares fell by 15 percent, bringing it to the bottom of the SDax.
Cryptocurrencies under pressure
The fact that investors on both sides of the Atlantic are avoiding risky investments at the start of the week is also evident when looking at cryptocurrencies that are considered highly speculative. Bitcoin, for example, continued to lose ground. The price of the oldest and best-known cryptocurrency fell to 49,650 US dollars on the Bitstamp trading platform, reaching its lowest level since February. In addition to Bitcoin, other cryptocurrencies were also under strong selling pressure.
Source: Stern
