Dusseldorf The situation on the German stock market has deteriorated. The Dax closed 0.27 percent lower on Tuesday at 13,194 points, although an hour before the close of trading there was still a plus of 0.2 percent. The daily low is 13,156 points.
For the technical analyst Martin Utschneider from the private bank Donner & Reuschel, “following the initial euphoria in August, investors now have to align themselves neutrally or downwards again”. In his view, the focus is now on the 13,113 to 13,008 support area. The further development of the German stock market should also be decided there.
A look at the multi-month chart is enough to recognize the significance of the 13,000 point mark: the leading German index bounced off this round mark several times in June and July. During this period, the 13,000 level was both a longer support and then a key resistance.
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In the opinion of Utschneider, a downward breakout results in a short-term price target of 12,655 points. The last brands that can prevent a crash from a technical point of view are probably just below that. On the one hand the multi-month low from April with 12,438 points and on the other hand the low for the year with 12,390 points.
Purchasing managers’ indices stabilize the market
Purchasing manager indices had a positive impact despite weak data. On the one hand, analysts expected an even stronger decline, and on the other hand, supply bottlenecks and cost pressure have eased.
However, due to high inflation and rising interest rates, the German economy shrank in August more than it had since the beginning of the corona pandemic more than two years ago. The purchasing managers’ index for the private sector – industry and the service sector together – fell by 0.5 to 47.6 points. This is the lowest level since June 2020.
>> Read about this: Lowest level since 2020 – German economy shrinks faster in August
The barometer, which is widely observed on the financial markets, is thus well below the 50 mark, from which point it signals growth. Economists surveyed by the Reuters news agency had even expected a somewhat larger decline to 47.4 jobs.
According to S&P economist Phil Smith, the data “paints a bleak picture of the German economy. The ongoing weakness in the industry was exacerbated by the slowdown in the service sector,” said the expert. “However, since the danger of an energy crisis is still great, the prospects remain characterized by uncertainty,” warned the economist against over-optimism.
The euro has fallen 1.3 percent against the dollar since Monday and is currently trading at $0.9909, its lowest level in 20 years. Apparently, the European common currency is settling down below par with the dollar.
This capital outflow suggests that foreign investors in particular have sold European stocks. Especially since the two domestic sentiment analyzes by the Frankfurt Stock Exchange and the Dax-Sentiment survey by the Handelsblatt did not indicate a high willingness to sell.
Once again, an expiration day like last Friday was the starting point for larger price movements. On such days, options on indices and individual stocks expire at lunchtime and are then settled. The leading German index has already lost almost 500 points since Friday afternoon.
Gas price remains at a high level
Meanwhile, the gas price in Europe remains at a high level. Already on Monday it shot up by 18 percent to 292.50 euros per megawatt hour. The price for the September contract is currently 268 euros and three percent lower than yesterday’s closing price.
This is the TTF futures contract for Dutch natural gas, which is considered to be a trend-setter for the European natural gas market. Due to the unfavorable developments on the gas market, the Bundesbank considers it likely that economic output in Germany will fall in the winter months.
Expectations of future interest rate hikes by the US Federal Reserve at the forthcoming meeting on September 21 have now changed significantly. According to the Chicago futures exchange’s Fed Watch tool, 56 percent of investment professionals now expect an increase of 75 basis points. A week ago it was 41 percent. Accordingly, the yield on the ten-year US government bond has meanwhile climbed back above the three percent mark and is currently at 2.98 percent.
Look at individual values
In the Dax, the shares in those economically sensitive sectors in particular recovered, which had come under heavy pressure the day before. With Covestro and BASF, two companies from the chemical sector gained 2.3 percent and 1.5 percent, respectively. In addition, investors grabbed auto stocks again. The paper from BMW, Porsche and VW are between 1.8 and 2.8 percent in the plus.
Lufthansa: Statements by the largest shareholder, Klaus-Michael Kühne, have little impact on the airline’s shares. Kühne had ruled out increasing his stake. Lufthansa shares are about one percent lower.
DAY Property: Higher rents and falling vacancies fill the coffers of the group and please investors. After the announcement of an increased operating result from the rental business (FFO 1), the real estate company’s shares rose 2.5 percent.
Dermapharm: The Bavarian drug manufacturer defied rising energy and raw material costs and grew in the first half of the year. The Executive Board expects the positive development to continue and has therefore confirmed its targets for the year. However, the stock fell 4.8 percent.
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