Dusseldorf The war in Ukraine and the West’s sanctions against Russia are causing alarm on the markets: the Dax has fallen significantly since its record high in January and is now trading at 12,400 points. And it could go even further down.
Handelsblatt stock analyst Ulf Sommer can imagine under certain circumstances that the leading German index even crashes to 8000 points, as he said in “Handelsblatt Today Extended”.
If the Ukraine war lasts longer, the sanctions against Russia could lead to state bankruptcy. Possible consequences for the global economy would be a recession including an energy crisis and massive negative effects on private consumption and companies.
Conversely, in the event of an early end to the war, Sommer believes that a relief rally is likely, in which the Dax could very quickly reach the pre-war level and even tackle 16,000 points again.
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However, investors would currently have to reckon with both scenarios. Sommer warns: “The Dax and Germany are more dependent on Russia and what is happening there than most other stock market indices and than most other countries in Europe.” One reason for this is Germany’s high dependence on energy imports from Russia.
High petrol and diesel prices: “It’s like hyperinflation”
Drivers feel the effects of the massive rise in oil and gas prices when filling up: petrol and diesel currently cost well over two euros per liter – and this could go up even further. “I have never seen petrol and diesel prices go up by one, two or three cents practically every day. It’s like hyperinflation,” Sommer said.
But not only the oil and gas prices are climbing, the price of gold has recently risen to more than $2,000 a troy ounce. In times of crisis, many investors flee to so-called safe havens. Irrespective of how long the war in Ukraine lasts, Sommer believes that investing in gold makes sense as a hedge.
In the current episode, Handelsblatt stock analyst Ulf Sommer also explains which sectors are relatively safe in these times – especially from the point of view of a “morally valuable” investment strategy.
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