Dusseldorf At the start of the stock exchange in Frankfurt, investors acted cautiously on Wednesday. The leading German index was last down 0.3 percent at 15,050 points after briefly falling below the 15,000 point mark.
“So far, the Dax has successfully resisted a major setback. However, there is a lack of positive impetus for a further rise in the price,” explained analyst Thomas Altmann from QC Partners. On Tuesday, the Dax closed 0.1 percent lower at 15,093 points.
The shares of the Leopard tank manufacturer Rheinmetall increase by 1.6 percent to 226.60 euros. On Tuesday evening it became known that Germany wants to deliver main battle tanks to Ukraine. The arms company’s stocks have soared 170 percent since Russia invaded Ukraine last February.
Only a few impulses came from Asia on Wednesday: The stock markets in China, Hong Kong, Singapore, Malaysia, South Korea and Taiwan remain closed due to the Chinese New Year and will not open again until January 30th. The Japanese stock exchanges recorded slight gains.
Mixed signals are coming out of the US, with the Dow Jones blue chips gaining modestly, but the broader S&P 500 and tech Nasdaq falling somewhat. The focus there was on continuing the reporting season.
In Germany, too, many market participants are waiting for the publication of further company balance sheets, which are due on Wednesday. “So far, the company figures have not been too bad, but investors are not overjoyed either,” said market strategist Christian Henke from the trading house IG.
The focus is primarily on the e-car manufacturer Tesla and the US aircraft manufacturer Boeing, both of which are presenting their figures.
Investors are also looking to the publication of the business climate index, which the Ifo Institute presented for the first time in the new year. As expected by experts, the barometer rose to 90.2 points from 88.6 points in December. It’s the fourth climb in a row.
“The fourth rise in the index in a row strengthens the prospect of a trend reversal,” says Alexander Krüger, chief economist at Hauck Aufhäuser Lampe. However, pessimism continues to prevail among the companies surveyed. “Energy costs and material shortages continue to be a challenge for companies. In addition, there is a high risk of setbacks due to the respective corona situation in China.”
The Ifo business climate has recovered significantly, “because the easing on the gas market further reduced the fears of companies of a severe recession,” says Jörg Krämer, chief economist at Commerzbank. However, he warns that the business climate is still at a level where recessions have regularly occurred in the past. “In addition, the central banks in many countries had to massively raise their key interest rates because of the high inflation. A mild recession remains the more likely scenario.”
In addition, the federal government has presented its annual economic report. She assumes that the economy will grow by 0.2 percent. According to Federal Minister of Economics Robert Habeck, the economic crisis resulting from the Ukraine war is now manageable. According to Habeck, Germany has proven its resilience and has done very well economically. There is no longer any sign of a clear recession.
According to the report, the government is expecting inflation of 6.0 percent for the buying year, and inflation in 2022 was 7.9 percent. In addition, the government is assuming that German exports will grow less strongly and that the labor market will develop largely stably.
Since the beginning of the year, the Dax has recorded strong price gains: the leading index has increased by 8.4 percent overall. Market participants are counting on the economic development in Germany not being as bad as initially feared.
Look at the chart technique
The Dax continued to stay above the 15,000 point mark on Tuesday. This area remains in focus. The first stop-loss marks, which investors use to protect themselves against falling prices, are likely to be just below this level.
From a technical point of view, a healthy consolidation would be beneficial. There is further technical support in the area around 14,800 points, as well as short-term around the current price level of 14,980 points. On the upside, the technical resistance lies at 15,365 points.
Look at the euro and oil
Oil prices edged up slightly in early trade on Wednesday. In the morning, a barrel (159 liters) of North Sea Brent for delivery in March cost $86.52. That was 32 cents more than the day before. The price of a barrel of US grade WTI rose by 22 cents to $80.35.
The euro continued to trade near the $1.09 mark on Wednesday. In the morning, the common currency cost $ 1.0895, slightly more than the previous evening. The exchange rate is thus slightly below its highest level for around nine months. The European Central Bank had set the reference rate at $1.0858 the day before.
Look at individual values
Rheinmetall: Rheinmetall shares rose by around 1.6 percent. According to media reports, Germany will deliver the Leopard main battle tank, manufactured by the armaments company, to Ukraine. “While the direct financial impact would be limited, it would create a very positive sentiment for the stocks,” said one trader.
Fresenius: Fresenius shares fell by around two percent. The hospital and medical group faces the problem of high levels of debt in the middle of its strategic review process. After several profit warnings and problems, Fresenius is in turbulence, especially at its dialysis subsidiary Fresenius Medical Care (FMC).
Jungheinrich: Jungheinrich’s shares rose by around four percent at the top of the MDax and rose to their highest level since February 2022. The forklift manufacturer is expanding its warehouse automation business with the takeover of the Storage Solutions Group. The acquisition is a “great addition” for the forklift manufacturer, commented a broker.
More: Which stocks benefit from falling inflation.