Dax closes in the red despite robust economic data – concern about interest rate increases is increasing

Dusseldorf After a setback in early trading, the Dax made up for some of the losses in the afternoon. The leading index still ended trading in the evening with a minus of 0.52 percent at 15,398 points. On Rose Monday, the Dax went out of trading almost unchanged at 15,478 points.

In the morning, the publication of robust economic data was the reason for the surprising setback about an hour after the start of trading. According to the purchasing manager survey by the financial services provider S&P Global, the German economy has grown again for the first time in six months.

This fueled investor concerns about further rate hikes by the European Central Bank. The data are not good enough for economic optimism, agrees Ulrich Wortberg, market analyst at Helaba.

The numbers do point to weak economic momentum. “Nevertheless, the sentiment indicators will probably not deter the ECB from raising interest rates,” said Wortberg.

Only in February did the European Central Bank decide to raise the key interest rate again by 0.5 percent. Since then, several central bankers around ECB President Christine Lagarde have signaled that this monetary policy will be maintained until inflation falls sustainably – most recently Finnish Council member Olli Rehn. This causes frustration among investors.

Unchanged trading range

With the current listing, the German stock exchange barometer remains within the narrow trading range of the past few weeks. On the top is the annual high of 15,659 points from February 9th. On the downside, the area between 15,250 and 15,275 points is a resistance. Only when the Dax breaks out of this range of 400 points will there be a lasting change in the direction of the German stock market.

Stock market strategists expect prices to continue to rise. Because in stock market history, a weak year with losses – like 2022 – was always followed by a strong one. However, in these strong years, significant course corrections usually took place before the summer.

Investors are now trying to anticipate this setback and are risk-averse in the meantime. They don’t want to be caught unawares by falling prices and instead look for profit-taking.

>> Read also: This allows investors to benefit from corrections in the stock market

Jochen Stanzl from CMC Markets observes that some investors are also shifting their portfolios in favor of fixed-term deposits. “The share is no longer without alternative, the interest rate is no longer negative. The stock market world has turned 180 degrees on this matter.”

Interest rate concerns are also determining the US stock exchanges

No major impetus is expected from Wall Street on Tuesday either. After the holiday-related break on Monday, the trading day started weak. Because one day before the minutes of the last interest rate meeting of the US Federal Reserve are published, many investors remain in a waiting mood.

The so-called Fed Minutes show the majority with which the decision to increase the key interest rate by 0.25 points at the beginning of February was taken. From this information, investors try to figure out how the Fed’s interest rate policy could turn out. Further interest rate hikes are likely to cause pessimism in the markets.

Look at individual values

Adva Optical Networking: The Bavarian network supplier met its goals in the past year. At 712 million euros, sales in 2022 were within the range of 680 to 730 million euros lowered in the summer, as the company announced on Tuesday. Net profit, on the other hand, collapsed by two-thirds. The Adva share loses 0.36 percent. However, the Adva numbers support the parent company, the US telecom equipment supplier Adtran, whose papers in Frankfurt are gaining almost four percent at the top.

Commerzbank: Even today, the promotion to the Dax 40 moves the stock market price of the financial institution. On February 27, Germany’s second largest private bank will replace industrial gases specialist Linde in the index, which has withdrawn from the Frankfurt Stock Exchange. At the close of trading, the papers were up almost 2.3 percent.

German Stock Exchange: The analysts of the investment bank Jefferies changed the share from “buy” to “hold” and lowered the price target from 210 to 190 euros. This puts a strain on the share certificates of the stock exchange operator, they have lost more than three percent in the meantime, finally closing 1.37 percent in the red.

Rheinmetall: The promise of German politicians to deliver armored personnel carriers to Ukraine means that the armaments company continues to rise in share price. The share, which is listed in the MDax, has increased by around 3.3 percent.

Zalando: The online retailer plans to cut 17,000 jobs in order to cope with the declining consumer appetite. The stock lost 1.86 percent at the close of trading.

Credit Suisse: After an inquiry from the financial market regulator Finma about outflows of customer money from the institute, the share slipped to a record low. The shares of the crisis-plagued major Swiss bank fell by more than five percent to 2.60 francs. This makes Credit Suisse the biggest loser among both Swiss blue chips and European financial services stocks. During the course of the trading day, the value recovered only slightly.

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