Deutsche Börse: Dax loses again – economy

Frankfurt am Main – The new week started just as badly as the last trading week ended!
The ongoing interest rate and economic concerns have brought more severe losses to the German stock market. Despite the surprisingly brighter business climate on Ifo and the re-election of French President Emmanuel Macron, the main German index lost 1.54 percent to 13,924.17 points at the end of the day. Meanwhile, it had fallen to its lowest level since mid-March.

The MDax for midsize companies ultimately fell 1.81 percent to 30,241.21 points. On Friday, both indices had dropped further.

Investors also had to deal with losses again at the start of the week in other markets: the eurozone’s leading index, the EuroStoxx 50, closed down 2.15 percent at 3,757.59 points. France’s Cac 40 also fell a good two percent despite Macron’s election victory, while London’s FTSE 100 closed with a similar loss. In New York, the main US index, the Dow Jones Industrial, fell about one percent at the close of the European stock market.

The prospect of a rapid rise in key US interest rates, the Ukraine war and its aftermath, and coronavirus lockdowns in China still fuel fears of a global recession.

Recession fears weighed heavily on cyclical sectors such as banks and insurers, with their sub-indices suffering the biggest losses in the Stoxx Europe 600 of the entire market. In Dax and MDax, Deutsche Bank and Commerzbank trailed behind with price declines of 5.7 and 6.8 percent respectively. Metal prices, weighed down by concerns about the economy, hit share prices of copper and steel companies, as discounts of 6.7 and 8 percent to Aurubis and Salzgitter show, respectively.

Stocks in high-growth tech companies, whose valuations are seen as particularly vulnerable in times of rising interest rates, were also avoided. These included food delivery service Delivery Hero, meal kit provider Hellofresh and online fashion retailer Zalando with losses of 2.3 to 4.2 percent. Over the course of the year to date, the aforementioned stocks are among the weakest stocks on the Dax.

The titles of the real estate group Adler Group, which traded below ten euros for the first time since February, do not rest. In the end, they lost 20 percent to €9,375 as a taillight on the small-cap SDax index, showing shareholders still don’t believe in a release following the report by KPMG auditors on Friday.

However, stocks in sectors considered defensive and comparatively resilient to economic and political uncertainties attracted buying interest. In the main German index, these were above all consumer goods maker Henkel, energy providers RWE and Eon, medical technology group Siemens Healthineers, which ultimately challenged weak figures from competitor Philips, and real estate group Vonovia. with price gains of between 0.7 and 1.7 percent.

In the German bond market, prices rose on Monday. The Rex bond index rose 0.21 percent to 136.10 points, while the opposite current yield fell to 0.79 percent from 0.83 percent. Bund futures rose 1.2 percent to 155.10 points.

The bad mood in the financial markets also weighed on the euro, which fell to 1.0706 US dollars. The European Central Bank had previously set the benchmark rate at $1.0746.


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