Dusseldorf After a friendly start on Monday, the 2023 trading year really got underway on Tuesday. The first trading on the US stock exchanges this year and the provisional German inflation rate for December had the potential to shake up the stock markets properly.
After a significant gain in morning trading with an interim plus of around 225 points and a daily high of 14,293 points, profit-taking followed. At the end of trading, the Dax was still up 0.8 percent and was trading at 14,182 points, an increase of 112 points. Yesterday, Monday, the leading German index again surpassed the 14,000-point mark and ended the session up one percent at 14,069 points.
The market is supported by the declining inflation data. The inflation rate in Germany fell significantly in December compared to the previous month.
Consumer prices increased by 8.6 percent compared to the same month last year. The inflation rate was in double digits for three months. In October, the inflation rate was 10.4 percent, its highest level since 1951
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The capital market expert Thomas Altmann from the investment house QC Partners is allowed to be happy about the declining inflation rate. “But no one should expect the ECB to change course. First, the inflation rate must fall across the eurozone. And second, many more declines must follow before inflation gets anywhere near the ECB’s 2% target,” he explains.
At least the risk that the ECB will raise more than previously priced into the market has decreased today. And that’s good news in these times.
What the Dax chart technology says
It is quite possible that the level of the inflation rate will also determine the direction for the coming trading days. Because according to the Handelsblatt survey Dax-Sentiment, many investors are currently waiting. So there is enough capital to get back in if the news is positive. After evaluating the current data, sentiment expert Stephan Heibel is certain that “even a small amount of interest in buying should ensure rising prices”.
According to the chart technology, the next hurdle was 14,150 points, the lower limit of a sideways phase lasting several weeks from mid-November to mid-December 2022. This mark was already surpassed in morning trading, and the stock market barometer was still above this mark at the end of trading. The upper limit of this range is 14,584 points. In addition, there was only a brief jump to 14,675 points, but this can only be seen as a slip.
On the downside, the low of the price slide in mid-December, which is 13,792 points, is important. The 200-day line at currently around 13,570 points is important for strategic investors. As long as it holds, the ongoing consolidation is still healthy.
For Jörg Scherer, technical analyst at HSBC Germany, the level at around 13,500 points continues to be an extremely important retreat area to watch out for.
China’s industry continues to shrink
Better than expected economic data come from China. China’s industry contracted for a fifth straight month in December amid disruptions to production amid rising coronavirus infections, with the official manufacturing purchasing managers’ index (PMI) falling to 49.0 in December from 49.4 in November.
The reading was the lowest since September but topped analysts’ forecast, who had expected 48.8 in a Reuters poll. The index has been below the 50-point mark, which separates growth and contraction, for five straight months.
Look at the individual values
Fresenius/Fresenius Medical Care: A positive analyst comment gives the Fresenius paper a boost. The shares of the healthcare group rise by almost three percent to around 27.15 euros. The experts at the investment bank Jefferies upgraded the title to “buy” and raised the price target to 35 from 24 euros.
The shares of Fresenius Medical Care (FMC), on the other hand, downgraded from “Hold” to “Underperform” and reduced the price target to 22 from 29 euros. The share of the dialysis specialist loses 0.5 percent to around 30.20 euros.
Morphosys: A negative analyst comment weighed on the paper listed in the SDax. The biotech company’s shares have since fallen by more than three percent. At the close of trading, the shares were almost unchanged at EUR 13.50. JP Morgan’s experts downgraded the stock from “neutral” to “underweight” and cut the price target to eleven from EUR 18.
burning day: After public criticism from a shareholder, the chemicals trader decided not to take over its US competitor Univar Solutions. In response, Brenntag shares rose by more than five percent.
Shortly before Christmas, the activist shareholder PrimeStone called for the takeover talks to end. The risks of such a transaction are very high and far outweigh the benefits. Instead, Brenntag should buy back shares and prepare for a split, according to an open letter from PrimeStone to the Brenntag board.
Bayer: A downgrade causes problems for the paper. The shares of the pharmaceutical and agrochemical group fell by 0.3 percent to 49.73 euros. The experts at JP Morgan changed the title to “Neutral” from “Overweight” and reduced the price target to 60 from 77 euros.
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