Dusseldorf The consolidation on the German stock market has been postponed. The Dax stabilized again on Friday after the losses of the previous day. The leading index is 0.6 percent higher in the afternoon, just over 15,000 points.
The day before there had been a significant setback of 1.7 percent. Movements of this kind could happen again and again in the current market phase. After all, the Dax has risen very strongly in a very short time. It has lost just over two percent since the most recent rally’s high of 15,270 points.
The area around 15,000 meters is currently of great interest. On the one hand, the first stop-loss marks, which investors use to protect themselves against falling share prices, are likely to be just below the rounded level.
On the other hand, trading on Friday shows that there is still buying interest in this area. The Dax managed to jump over 15,000 points very quickly – not all investors participated as desired. Some of those who initially missed their chance could use minor setbacks to get in and thus stabilize the overall market.
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Patience is an important virtue. In the week before and after Christmas, the leading index had fluctuated sideways for days around the round level of 14,000 points at the time. Those who had staying power were rewarded with the following course increases.
The number of impulses is low on Friday, trading rather quiet compared to the rest of the week. The impact of the small expiry date was manageable. At noon, the futures contracts on the leading German index and on individual shares expired. On such days, investors strive to achieve a result that is favorable to them. On larger expiration days, also known as the Witches’ Sabbath, more futures contracts expire, so the impact on trading is even greater.
Data from the Stockstreet website shows that by far the largest call option on the Dax – investors use this product to bet on rising prices – was just 15,000 points. However, the Dax settlement price was below this level, which is why these options expire worthless. The sellers of these call options, known in technical jargon as writers, can book their premium for the sale without deductions.
The interest rate policy of the central banks continues to have the greatest influence on share prices. The Governing Council of the European Central Bank (ECB) is trying to vehemently counter speculation that interest rates will be slowed down.
The day before, at the World Economic Forum in Davos, the head of the central bank, Christine Lagarde, made it clear that interest rates in the euro area will continue to rise. In an unusually blunt tone, she said markets would be “well advised to reconsider their position,” adding to the pressure on stocks and bonds. On Friday she reiterated that she wanted to “stay the course” in the fight against inflation.
The starting position has hardly changed. The ECB made it clear in December that it intends to increase interest rates by 50 basis points in the short term. Abandoning this strategy in the short term would jeopardize their credibility.
An increase of 50 basis points in February is taken for granted and is also the base scenario for the next but one decision in mid-March. The mood around this date then depends heavily on whether the downward trend in inflation is confirmed in the months of January and February.
“The prospect of cheap money from the central banks is like a honey trap that investors get stuck on,” says Jochen Stanzl from CMC Markets, describing the situation. “Although those responsible in Fed [US-Notenbank, d. Red.] and ECB keep at it, and a few overly speculative investors fall off. Two or three days later, however, they stick again because they see weaker inflation data as confirmation.”
What the chart technique says
From a technical point of view, a healthy consolidation would also do the Dax good after the dynamic rally and the plus of nine percent since the beginning of the year. On the upper side, the area around 15,365 points is interesting in the medium term. There is further technical support in the area around 14,800 points. In the short term, the current price level around 14,980 points is relevant, and there is also support there.
The Dax manages to establish itself above important average lines such as the 100 and 200-day line. These primarily serve as orientation for medium- and long-term investors. The technical upward trend since November is still intact, summarizes Martin Utschneider from the private bank Donner & Reuschel.
Individual values in focus
SiemensEnergy: The shares lose more than one percent. The Dax group lowered its earnings forecast for 2023 on Thursday evening. The reason for this was the burden on the wind power subsidiary Siemens Gamesa due to unexpectedly high guarantee and maintenance costs.
Zalando: Investors are accessing online fashion retailers after an encouraging comment from the US money house Bank of America. Asos stocks are up ten percent in London, while Zalando stocks are at the top of the Dax with a plus of more than four percent. As the two companies focus on savings and strengthening their balance sheets, they could be on track in 2023, analysts say.
Continental: A negative analyst forecast pushes the shares of European auto suppliers into the red. The papers of Continental, Vitesco and Faurecia lose between two and three percent. Experts at the US investment bank Jefferies write that investors have too much confidence in the ability of the three companies to pass on the above-average cost inflation to customers. As a result, they downgrade Continental and Vitesco to hold from previously buy and Faurecia to underperform from buy. The courses of the rivals Valeo and Michelin crumble in this wake by up to 2.2 percent.
Hypoport: The financial intermediary scares investors with a capital increase. Hypoport announced on Friday that 378,788 new shares had been placed with investors at EUR 132 each. The gross proceeds from the issue are around EUR 50 million. The titles fall back to 134.40 euros. Later they are 3.5 percent lower at 141 euros.
Thyssen Krupp: Deutsche Bank has increased its price target for the industrial group by 50 cents to EUR 8.00 and recommends holding the share. Analysts expect a solid first quarter. The share rose by 2.5 percent above the seven euro mark.
ericsson The shares of the Swedish network equipment supplier lose up to eight percent on the Stockholm stock exchange to below 57 crowns – the lowest price level since 2018. The adjusted operating profit for the fourth quarter fell significantly and was also well below expectations.
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