Dusseldorf A small counter-movement was discernible on the German stock market on Monday, but this has not changed the general downward trend. The Dax closed one percent higher at 15,471 positions. In the meantime, things were even looking much better for the leading German index: the daily high was 15,566 points, an increase of around 250 points.
Notorious optimists even recognize a friendly trend from the turbulent course of the past week. The weekly low on Monday was then no longer undershot, and in the last three trading days of the past week the important mark of 15,000 jobs was not negotiated at short notice.
But it is rather unlikely that the leading German index will rise above the 16,000 point mark again in the short term or even mark a new record high, which would mean prices over 16,290 points. It is likely to be a relief rally as a sustainable bottom may not yet be in place.
Warning signs are coming from both technical analysis and domestic investor sentiment. Two points of the current sentiment data show how high the hurdle for the Dax is.
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On the one hand, there is the high investment rate, both among private investors and among institutional investors, as the survey by the Frankfurt Stock Exchange revealed. At the same time, according to the current Handelsblatt survey Dax-Sentiment, optimism about the future is increasing, the expectation of higher Dax prices in three months.
However, if all investors are convinced of rising prices and already have a lot of shares in their portfolio, who should take care of rising prices? A similar situation already existed in the summer months of last year. At that time, too, there was a high investment rate, coupled with a high degree of optimism about the future.
In the months of August and September, the leading index tried in vain to sustainably break the 16,000 point mark. This situation was resolved with a drop of more than 1000 points.
From a technical point of view, the downward trend is still intact, there would only be the first signs of relaxation if the Dax surpassed last week’s high of 15,587 points or even exceeded the 200-day line, which is relevant for the long-term trend, which is listed at 15,610 points .
A high degree of nervousness is also noticeable on the market. Flash sell-offs occur again and again, which then lead to a slow recovery. So there was a slide of 600 points on Monday, last Friday it went down 400 points in the meantime, before the market slowly calmed down and the price climbed up again.
For the sentiment expert Stephan Heibel, “probably trading algorithms react to fundamental changes such as interest rate expectations or the Ukraine conflict”. No demand can develop as quickly as sales are made. “By the time people realize that prices are already down 3 percent or more, the algorithms are done adjusting and prices can go back up,” he says.
Inflation data causes yields on ten-year Bunds to rise
The hope of a significant drop in inflation at the beginning of the year has not been fulfilled: consumer prices rose by 4.9 percent in January, as the Federal Statistical Office announced on Monday based on an initial estimate. It is the first decline in the inflation rate after six increases in a row. However, economists had expected a lower value of 4.3 percent. In December, the price increase was 5.3 percent.
Economists are controversially discussing whether the sharp rise in prices over the past year is temporary or will last longer. The European Central Bank (ECB) expects inflation in the euro area to weaken significantly over the course of the year. It therefore intends to stick to its loose monetary policy. In the past few weeks, however, energy prices have once again caused greater price pressure.
Look at the individual values
The recently penalized pandemic winners were in demand again on Monday. At the top of the Dax, the shares of the food delivery service Delivery Hero gained 7.3 percent. Hellofresh increased in price by 5.9 percent. The titles of the chip group Infineon increased by 3.1 percent in the course of the recovery of the tech stocks. With an increase of almost four percent, Henkel recovered a little from its price slump of more than eleven percent on Friday.
stabilizer: Investors reacted to the business figures with purchases. The title of the auto supplier rose by 5.1 percent. The operating profit is slightly below expectations, says a broker. “But stocks fell quite quickly last week.” They fell by a total of 14 percent.
sixt: CEO Alexander Sixt told the Handelsblatt that the market volume is expected to be the same or increase in 2022, but with significantly fewer vehicles. For this reason, prices can be expected to tend to rise. The stock climbed 0.7 percent.
Ryanair: Despite a loss in the past quarter, the Irish low-cost airline does not expect to be able to raise prices. This caused the share to fall by 2.8 percent. While bookings have improved thanks to the easing of travel restrictions, the booking curve remains very late and very tight, said Ryanair boss Michael O’Leary. Air travel in the fourth fiscal quarter (ended March 31) requires significant price stimulation at lower fares, he added. The prospects for the current quarter are still “extremely uncertain”.
Continental: Positive analyst comment encouraged investors to buy. The shares of the auto supplier rose by 1.9 percent to 84.94 euros. The experts at HSBC upgraded the title to “buy” from “hold” and raised the price target to 115 from 105 euros.
Adva Optical: The network supplier is about to be taken over by Adtran. According to the two companies, Adva owners have offered the glass fiber specialist more than 60 percent of the shares. This means that the minimum acceptance threshold has been exceeded. With a plus of 16.5 percent, Adva titles posted their biggest daily gain in twelve and a half years.
VIB assets: A takeover offer also boosted real estate papers, which rose by up to 3.9 percent to EUR 51.00. The rival DIC Asset wants to take over 51 percent of the commercial real estate company for EUR 51 per share.
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