Dusseldorf After the significant losses of the previous day, the Dax has stabilized: the leading German index went up 0.9 percent on Tuesday at 12,871 points, the daily high was 12,928 points. On Monday, the Frankfurt benchmark ended trading down 2.2 percent.
It is quite possible that there will be no major directional decision on the German stock market by Thursday this week. Then the European Central Bank (ECB) decides on the level of interest rates in the euro area. So far, it has always seemed clear how the ECB will decide. But that is different now. Rarely has the ECB been so open in advance what the decision will be.
Even if the trend, especially since the central bankers’ symposium in Jackson Hole, has been moving more and more in the direction of an increase of 75 basis points: “That’s far from set in stone,” says capital market expert Thomas Altmann from the investment house QC Partners.
In his opinion, a 50 basis point hike is not off the table just yet. That would be a positive surprise for the markets.
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Despite the significant losses on Monday, the trading day also had something positive. The support area around 12,600 points held and invited bargain hunters to enter for the second time. Altmann believes that as long as these bargain hunters are out and about, falling through is unlikely.
Technical explanation: The Dax has been in a short-term downward trend since mid-August, starting from 13,947 points on August 17th. Since then, the stock market barometer has stopped at around 12,600 points twice. Chart technicians call this support area.
If the Dax falls below this mark, it is likely to slide towards the low for the year, which is 12,390 points. The medium-term path of the German stock exchange barometer should then be decided there. Recapturing the 13,000 point mark is necessary for short-term stabilization.
Positive news came from investor sentiment. For the sentiment expert Stephan Heibel, according to the Handelsblatt survey, the market is relatively close to bottoming out, at least in the short term.
The current mood of panic, which suggests that many sales have already been made, coupled with increasing optimism about the future and a relatively high willingness to invest, speaks in favor of a bottoming out from which prices will rise again.
Gas prices drop again
Prices on the gas market are falling again. The price of the October futures contract TTF is currently listed at 219 euros per megawatt hour, a drop of around ten percent compared to the previous day’s close. The TTF contract is often used as a guide to European price levels. On Monday, the price rose by 35 percent to 284 euros per megawatt hour, but calmed down again in the course of trading.
For anyone familiar with the market mechanisms, the development of the gas market over the past few weeks is as follows: With the announcement by the governing coalition that it was essential to fill up the gas storage facilities before winter, speculators got on board. In stock market jargon, this is called a “free lunch”, a profit with no or very little risk. The price went up to 340 euros per megawatt hour. Government loans were used to pay prices that no gas storage operator would otherwise pay.
When the gas storage tanks were almost full and large quantities were no longer needed, the speculators realized their profits, the price slipped to 214 euros last Friday.
This raises the question of why the price then climbed again by 35 percent on Monday. The news that Gazprom will stop supplying gas via Nord Stream 1 for the time being did not come as a surprise to the market. Perhaps it was inexperienced market participants who bought out of panic on Monday. If so, the gas price is likely to fall further in the coming days – and in return support the stock market.
Look at individual values
VW/Porsche: The prospect of the IPO of the sports car subsidiary Porsche at the end of September made investors grab shares of Volkswagen. The shares of the car company rose by 3.7 percent after the committees gave the go-ahead for an IPO for preferred shares in Porsche AG the previous evening. The shares of the major shareholder of the Wolfsburg car group, the family holding company Porsche SE, fell 0.2 percent.
Delivery Hero: The price benefited from positive analyst commentary. The stock rose by seven percent. Morgan Stanley upgraded the food delivery company’s stocks to overweight from previously equal-weight.
Siemens Energy/Hellofresh: The energy technology group Siemens Energy returns to the first German stock exchange league. The company, which only had to leave the Dax six months ago, will replace the Hellofresh food delivery service in two weeks – on September 19th. Siemens Energy shares lost 0.1 percent. Hellofresh’s stock is up 4.5 percent but is down more than 60 percent year-to-date.
Unipers: The ailing energy company brought up the rear in the MDax small-cap index with a minus of around five percent. In contrast, the shares of the main shareholder Fortum on the Helsinki stock exchange rose by more than eight percent after the utility secured bridge financing of 2.35 billion euros from the Finnish state. Uniper’s days in the index for medium-sized companies are numbered after Deutsche Börse’s regular review of the index composition.
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