Dusseldorf The German stock market reacted with slight gains to the announcement by the European Central Bank (ECB) that it would end its net purchases of bonds from the summer. The leading index Dax was up 0.6 percent on Thursday afternoon at 14,160 points. However, the Frankfurt stock exchange barometer was unable to maintain the daily high of 14,199 points.
After the recent price turbulence, the analysts at Helaba see no sign of an all-clear: “Since there are no signs of easing in the Ukraine conflict, the willingness to take risks remains low. The technical picture is also clouded as long as the Dax is listed below the resistance in the range of 14,300 to 14,360 points.”
On Wednesday, the Dax ended trading 0.3 percent weaker at 14,076 points. The trading range (13,962 to 14,100 points) was completely within that of the previous day (13,887 to 14,180 points) – a so-called inside day. In technical analysis, this is interpreted as the market being undecided about direction. The breakout of this narrow trading range then indicates the further direction.
However, the ECB did not provide enough fresh impetus for a new market direction. As a preliminary stage to a turnaround in interest rates, she initially wants to phase out her bond purchases worth billions. However, the end of the so-called APP program envisaged for the summer is linked to the condition that the inflation outlook does not deteriorate. The ECB is actually aiming for a target value of 2.0 percent, but recently inflation had shot far beyond that at 7.5 percent.
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>> Read about this: ECB leaves interest rates unchanged.
The ECB is thus delaying an interest rate turnaround in times of the Ukraine war. The ECB Governing Council decided on Thursday to maintain the key monetary policy rate of 0.0 percent. At the same time, banks must continue to pay penalty interest if they hoard excess funds at the central bank. This so-called deposit rate remains at minus 0.5 percent.
The euro dropped to $1.0870 in a first reaction. At the same time, investors grabbed government bonds. As a result, the yield on the ten-year federal bond initially fell from 0.806 percent to 0.752 percent, but then rose again towards 0.8 percent.
Support comes from Asia on Thursday. Here the stock exchanges also benefited from the expectation that the Chinese central bank could lower its key interest rate in order to strengthen the economy. The economic outlook has deteriorated due to the recent corona outbreak and the tough lockdowns.
Twitter stock gains from Musk bid
The Twitter share increases by more than ten percent on the Tradegate trading platform. The trigger is the news that Tesla boss Elon Musk has made an offer to buy the short message service. After the acquisition, Musk announced that he would take Twitter private.
Musk said he sees exceptional potential in the company as a platform for free speech that he wants to develop. The richest man in the world will offer $54.20 a share in cash, a 38 percent premium to the April 1 closing price and a value of about $43 billion. The day after it became known that Musk had joined Twitter with more than nine percent. However, supply is well below last April’s 52-week high of $73.21.
>> Read about this: TeslaCEO Elon Musk wants to take over Twitter.
Musk wrote that the price would be his final offer. If he fails with the takeover attempt, he will have to reconsider his commitment to Twitter. The Tesla boss has more than 80 million followers on Twitter and is one of the most popular users of the service.
The cryptocurrency Dogecoin also benefited from the news. At its peak, the price rose by more than five percent to $ 0.1459 and was last at $ 0.1433. Musk is considered a supporter of the Dogecoin and has repeatedly advertised the digital currency on Twitter through tweets.
Look at the individual values
Valneva: Great Britain was the first country to give the green light to the corona vaccine from the French pharmaceutical company Valneva. The responsible supervisory authority MHRA approved the application for people between the ages of 18 and 50 on Thursday. The share then rose sharply, and trading on the Euronext stock exchange was therefore temporarily suspended. After trading resumes, the price is up 15 percent.
“This year, the dividend thick ship is not a Dax group”
Volkswagen: Despite the war in Ukraine and faltering production due to the fight against corona in China, Volkswagen made billions in profits at the beginning of the year. The Wolfsburg-based company benefited massively from financial instruments with which the group has hedged against the rise in raw material prices. The operating result before special items jumped to around 8.5 billion euros in the first quarter, as the carmaker reported on Thursday based on initial estimates. The stock is still around 1.5 percent. At the same time, Volkswagen had to accept a slump in sales at the beginning of the year.
Lufthansa: In the MDax, the Lufthansa share is accelerating its recovery from the previous day. With an increase of two percent, it is one of the best values in the index of medium-sized stocks. They benefited from an industry-wide boost, which also benefited Fraport: Shares in the airport operator were at the top of the MDax with a plus of 2.5 percent. Aviation stocks were helped by low-cost carrier Wizz Air’s outlook for a good quarter.
Drägerwerk: A cautious forecast for the year means that the shares of the medical technology manufacturer in the SDax slip by more than five percent. The company is initially sticking to its outlook. Due to increasing difficulties in the delivery of electronic components, however, only the lower end of the forecast range can be expected, the company announced.
ericsson The Swedish network supplier fears a fine from the US authorities for possible bribes to Iraqi militias. The amount of the fine cannot be estimated. Ericsson also announced a decline in quarterly operating profit to 4.7 (previous year: 5.3) billion Swedish crowns (455 million euros). The stock fell by more than five percent in Stockholm.
Oil prices fall
Oil prices eased after two straight days of gains. In the afternoon, a barrel (159 liters) of North Sea Brent cost US$ 107.29. That is 1.4 percent less than the day before. The price of a barrel of the US West Texas Intermediate (WTI) variety fell by 1.3 percent to $102.85.
Most recently, the prospect of rising demand for crude oil had driven prices after the otherwise strict corona measures in the Chinese financial metropolis Shanghai had been relaxed. As the second largest economy in the world, China is one of the most important oil consumers. In addition, the country’s central bank is likely to take further measures to support the flagging economy.
However, there are currently arguments in favor of an increasing oil supply, which is likely to cause oil prices to fall. US inventories of crude oil have risen surprisingly significantly in the past week, as was announced on Wednesday. In addition, the member states of the International Energy Agency have released national oil reserves in order to mitigate the economic consequences of the Ukraine war.
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