Dusseldorf The 16,000 mark seems to be a difficult hurdle for the Dax to overcome. The leading German index closed slightly up at the start of the week, but remains below the 16,000 threshold. The Frankfurt stock exchange barometer went 0.3 percent firmer at 15,934 positions from trading. On Friday, the Frankfurt benchmark closed at 15,883, down 0.9 percent.
Papers from the pharmaceutical and health sector led the Dax. Fresenius Medical Care (FMC) gained 2.9 percent. Qiagen increased in price by 2.8 percent after a buy recommendation from DZ Bank. Merck advanced 1.4 percent. Henkel’s shares were at the bottom of the Dax with minus 2.8 percent – despite a somewhat friendlier rating from Morgan Stanley.
Sales on Monday were low because the US stock exchanges were closed on the “Martin Luther King Day” holiday. Around 35 million shares were traded recently, significantly fewer than last time. The trading day was calm and with little fluctuation.
From a short-term perspective, two marks are of great importance for the leading German index: in addition to the 16,000 points on the top, there are 15,800 points on the bottom. One of the two brands will probably be tested at the start of the week. After a slide below 15,800 points, investors should at least calculate a test of the long-term important 200-day line, which is currently listed at 15,595 points.
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Investors should keep in mind that on the downside there is little supportive demand from domestic investors. This was the result of the Frankfurt Stock Exchange survey last week.
An even clearer warning signal comes from the Handelsblatt survey Dax sentiment. The optimism about the future, the expectation of rising Dax prices three months later, continues to decline. There is now even slight pessimism.
This development does not have to have any significance for today’s trading day, but it is an important factor for assessing future market developments. Because only a high degree of optimism about the future ensures that price declines end quickly. Investors are only willing to buy again if they believe prices will rise.
The past stock market year was the best example of this. In 2021 there was no correction in the German stock market barometer, by definition a decline of at least ten percent. Because the always high level of optimism about the future prompted investors to quickly get back on board. There was a “buy the dip” mode, every setback, no matter how small, ended quickly.
Slight pessimism about the future suggests that the next decline could escalate into a correction, which would mean a jump to at least 14,661 positions. Investors should take that into account.
The listings of vaccine manufacturers and their suppliers show how much the stock market is looking ahead. These price developments show that the market appears to believe that the pandemic has peaked or has already peaked this year.
Due to the omicron variant, there is currently an extremely high demand for vaccines. For example, the US Federal Health Service has reduced both the age and the waiting time for a booster shot. Nevertheless, the titles of the vaccine manufacturers have been literally sold out for a few weeks. Since the end of November, the Biontech share price has halved, and Moderna’s has slipped by around 40 percent. The listing of the US pharmaceutical company Novavax, which is to deliver “quasi dead vaccine” to Germany at the end of February, has also fallen by 50 percent in this period.
This development can also be seen at the laboratory supplier Sartorius, which supplies important consumables for the countless PCR tests. In the course of the corona pandemic, the course has tripled. But since the beginning of the year, the price has slipped by 25 percent, in the past week alone there was a minus of 13 percent.
Look at the individual values
Covestro: In German industry, the race for green hydrogen is picking up speed. The Leverkusen-based plastics manufacturer Covestro pushed ahead with a supply agreement that is unique in the EU. In the future, the Dax group will purchase 100,000 tons of green hydrogen annually from the Australian manufacturer Fortescue Future Industries (FFI). The stock closed almost a percent in the red.
S&T: The IT company S&T, which has been hit by massive allegations by short seller Fraser Perring, intends to continue growing in the current year. This announcement caused a plus of 4.3 percent for the paper. S&T did not comment on the Fraser-Perring allegations that the company was completely overvalued. These are currently being examined by the auditing company Deloitte.
Siltronic: The 4.35 billion euro takeover of the chip supplier by the larger Taiwanese rival Globalwafers threatens to fail due to opposition from the German government. The hope that the transaction will be approved by the Federal Ministry of Economics is dwindling, as the company announced. The Siltronic share slipped by nine percent.
Varta: A stake increase by Goldman Sachs initially encouraged investors to invest in Varta. In the end, however, the battery manufacturer’s shares fell 0.2 percent. According to a mandatory announcement, the US investment bank now holds 5.02 percent of the company.
Mainz Biomed: After the Mainz success story Biontech, another high flyer from Mainz is currently being discovered on the stock exchange: Mainz Biomed. The shares of the cancer screening specialist, which has been listed on the US technology exchange Nasdaq since the beginning of November, continued their price rally with a record on Monday. On the Tradegate trading platform, they gained almost 38 percent at just under 25 euros.
Credit Suisse: The surprising change at the top of the Credit Suisse Board of Directors left its mark on the Swiss stock exchange at the start of the week. The second largest Swiss bank got under the wheels on Monday: Investors reacted with sales to the departure of President Antonio Horta-Osorio after only eight months in office for violating quarantine rules. The share price fell 2.2 percent.
The threat of war weighs on the stock exchanges in Russia and Ukraine
Rising tensions between Russia and Ukraine are making investors nervous. They threw government bonds from the two countries out of their depots on Monday. This pushed the yields on Ukrainian dollar bonds maturing in 2024 and Russia maturing in 2043 to 15.42 percent and 4.206 percent, respectively. This is the highest level since the stock market crash in spring 2020.
They also fear payment defaults if the two states go to war. Insurance against default on a $10 million package of Ukrainian bonds rose $26,000 to $868,000, data provider Markit said. Russian credit default swaps (CDS) rose by $8,000 to $185,000 – also the highest level since the spring 2020 stock market crash. Investors need to hedge against a default on government bonds by 8.68 percent annually in the case of Ukraine and pay 1.85 percent annually in the case of Russian bonds of the investment amount.
The Russian currency also came under pressure. In turn, the dollar rose to almost 77 rubles. The euro rose to 87.78 rubles. Russia’s geopolitical risk is at an all-time high after talks collapsed last week, analysts at BCS Global Markets said. “The course of future events is difficult to predict, but international investors are likely to hesitate at first.”
Since the end of October, the Russian currency has slipped around ten percent against the dollar. The RTS stock market index, which is traded in dollars and is the benchmark for Russian securities trading, lost more than 20 percent during this period.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.