The leading German index is in a downward trend this year.
(Photo: Bloomberg Creative/Getty Images [M])
Dusseldorf On the German stock market, the leading index continues to try to bottom out. On Wednesday, the Dax remained in the profit zone throughout trading. At the end of trading there were 14,362 points on the chart. This is also the daily high.
The course of trading confirms the assessments of sentiment expert Stephan Heibel after evaluating the Dax-Sentiment survey of the Handelsblatt. “Positive developments or the mere absence of further negative reports could ensure rising prices,” he said yesterday, Tuesday. So far there has been no major escalation in the Ukraine war, and the bond market is also taking a breather.
Michael Hartnett, chief strategist for global equities at Bank of America (BofA), takes a similar view. The BofA’s “Bull & Bear” index is at 2.0 points and is therefore on the threshold of a buy signal, wrote the US investment bank’s expert.
Due to the price gains on Wednesday, the Dax is further away from the threshold of 14,000 points. There seems to be a lot of buying interest there at the moment. When the stock market barometer briefly fell below this level the day before, it quickly went up again.
Top jobs of the day
Find the best jobs now and
be notified by email.
The technical situation on the German stock market is currently constructive, although the medium-term downward trend since the beginning of the year is still intact. That would only change if there were sustained courses above 15,000 points, which the Dax only just missed as part of its 2500-point rally from the beginning to the end of March this year. 14,952 points was the highest on March 29th.
And these gains from the so-called bear market rally, i.e. rising prices within a medium-term downward trend, have been constructively processed by the leading German index since the end of March. The bottom of this short-term down move is 13,887. Technical analysts call this a minimal correction, which is common after such a dynamic rally.
However, the Dax should not fall below this mark of 13,887 points if possible. Otherwise, the bottom attempt would have failed and the downtrend is likely to last longer than some investors would like. On the other hand, if this mark holds, there should be another attempt towards 15,000 points in the coming trading days.
Look at the bond market
The bond markets had a supportive effect on Wednesday. There, the yields on ten-year government bonds in Germany and across the Atlantic moved away from the multi-year highs they had reached on Tuesday. Ten-year US bonds shed 2.863 percent after up to 2.971 the previous day. Ten-year Bunds are yielding at 0.8485 after a maximum of 0.952 the previous day.
Investors are eagerly awaiting the publication of the “Beige Book” after the stock market close in Germany. From the US Federal Reserve’s economic report, they hope to draw conclusions about the pace of the expected interest rate hikes.
In the past few weeks, Fed executive James Bullard in particular had advocated stronger steps. The market is expecting a 50 basis point hike on May 4th. 40 percent of professionals believe the US interest rate will end the year between 2.5 percent and 2.75 percent.
Look at individual values
Chip Values: Investors grabbed here after the in Amsterdam chip equipment supplier ASML exceeded market expectations with its quarterly results and the share was able to increase by more than five percent. In Germany, Infineon climbed 2.3 percent in the Dax. The supplier Siltronic gained 4.4 percent in the MDax, and PVA Tepla even gained six percent in the SDax.
SiemensEnergy: The company is struggling with ongoing problems at the wind power subsidiary Siemens Gamesa and the consequences of the Ukraine war. As a consequence, the energy technology group is putting its annual forecast to the test. The share lost up to five percent in value. At the end of trading, the price was 1.6 percent lower at EUR 19.25.
Lanxess: Business is better than expected at the specialty chemicals company. The company assumes that in the first quarter earnings (Ebitda) before special items and sales will be well above average market expectations and the previous year’s result. This news gave the Lanxess paper a plus of 5.6 percent. The final figures for the first quarter are to be presented on May 5th.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.