Dusseldorf On the stock market, prices above 13,000 points, like last Friday, are apparently only a short episode. Nevertheless, there is one positive finding: In the course of trading, the Dax was able to break away from its daily low of 12,652 points and was up 0.57 percent at the end of trading. 12,905.48 points were on the scoreboard.
In view of the current risks relating to the unresolved energy issue, international delivery problems, the Ukraine war, inflation, geopolitical tensions and the risk of recession, the Dax has held up well so far. As long as the leading index does not fall below the low for the year of 12,390 points, a bear market rally is possible at any time within the intact downward trend.
But it is also clear that there is currently no sign of a trend reversal towards a sustained increase in prices.
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Perhaps the Dax will follow its classic seasonal pattern this year. That would look like this: After a small summer rally comes the final sell-off with prices below 12,000 points. The statistically weak month of September is predestined for this.
A final sell-off would result in a VDax above 50. This was the result of all major trend reversals in the past, such as the bursting of the technology bubble, the financial crisis or the Corona crash.
The VDax is the so-called fear barometer of the stock exchange and shows the future price fluctuations that professionals expect due to their commitments on the Frankfurt futures exchange Eurex. The higher the VDax is listed, the greater the fluctuations futures traders expect in the next 30 days.
The VDax is currently at a value of 30, which only indicates nervous trading. Since the Dax is currently around 350 points below the low for the year, this comparatively low VDax value signals something else. In order to reach a value of 50, the Dax could fall significantly lower.
Real estate values still under pressure
In view of rising interest rates, real estate values were under the most pressure in Europe, as the sub-index in the broad Stoxx Europe 600 showed. This index has lost 30 percent of its value since the beginning of the year.
A downgrade at Grand City Properties also weighed on performance. The shares lost more than five and a half percent and were as cheap as they were last in 2015. The US investment bank Goldman Sachs canceled its buy recommendation for the residential real estate group as part of a skeptical industry study and now recommends the share as “neutral”.
Meanwhile, at industry colleague TAG Immobilien, which is also listed in the MDax, the implementation of the capital increase has begun. The shares are traded without subscription rights. For every 101 old shares, the shareholders received a right to acquire 20 new shares. If you want to make use of your subscription right, you have to pay an additional 6.90 euros for the new paper. The subscription rights were traded at EUR 0.38 in the morning and the TAG shares at EUR 8.82 – a total of EUR 9.20. Compared to the previous day’s Xetra close of EUR 9.48, this is a mathematical minus of almost three percent.
On Thursday, TAG announced that it would issue around 29 million new shares to partially refinance the takeover of the Polish real estate company Robyg. This corresponds to almost a fifth of the shares outstanding to date. This should bring in around 200 million euros. Since then, the share price has fallen significantly to its lowest level since the turn of the year 2014/15.
Euro equal to US Dollar
The euro reached parity against the dollar this morning. This Tuesday there was a new 20-year low at $ 0.9998. Calculated from the annual high in February, the common currency has lost 13 percent.
According to Commerzbank foreign exchange analyst Ulrich Leuchtmann, the downward trend will continue. “I’m afraid that once this dam bursts, the euro could nestle under it until we (hopefully) know by the end of next week if the gas is flowing again,” he says.
The technical side also offers little hope for the common currency. From a technical point of view, the euro is still in an intact downward trend.
Martin Utschneider, technical analyst at private bank Donner & Reuschel, calculated a potential rebound to $0.992 on Friday when the euro was still trading at EUR 1.09. “That’s blatant – and currently also absolutely realistic,” says Utschneider. “There are no signs of a reversal or bottoming.” Below parity is still at $0.9603 – a low from 2002.
Investor sentiment is far from reaching levels that would reflect the record negative exchange rate. At least that is what the five-week average of sentiment signals. The investors’ planned entry levels are also shifting downwards every week.
Look at the individual values
BASF: Despite surprisingly strong quarterly figures and a confirmed forecast for the full year, the share price fell by one percent. Goldman analyst Georgina Fraser noted that investors are more likely to take the numbers as a look in the rear-view mirror given the difficult environment. They could also criticize that the Nutrition & Care area was disappointing and that the positive surprise was heavily influenced by the Other category.
Unipers: The recently shaken Uniper shareholders also had to cope with further price drops in the MDax. Shares of the struggling gas supplier fell more than 3 percent, remaining just above the previous day’s record low, to which they fell amid fears of a Russian gas freeze.
adtran: The future US parent company of Adva Optical Networking will replace the Munich network supplier in the SDax from Friday. Instead of the Adva shares submitted for exchange, the shares of Adtran Holdings would then be listed in the small-cap index.
For their shares, the Adva shareholders will each receive 0.8244 shares in Adtran Holdings, in which Adva and the US glass fiber specialist Adtran Inc will merge. Adtran Holdings is said to be listed on the Frankfurt Stock Exchange and on the US technology exchange Nasdaq. The Adva shares are traded at EUR 17.50, an increase of 0.1 percent.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.