Stock market in Frankfurt. - Dax experiences a 1% decrease.
On Tuesday, investors on the German stock market faced a cold shower. Weak car stocks, stemming from disappointing industry performance, caused the Dax index to decline noticeably. Additionally, the falling New York Stock Exchange on Wall Street negatively impacted the Dax, resulting in a loss of 1.03 percent to 17,932.17 points. This equaled roughly a 3 percent drop for the month of April. The MDax for medium-sized companies also slid 0.30 percent to end at 26,264.39 points.
Investors were hesitant due to numerous business figures, economic data, the upcoming holiday break, and the Fed's interest rate decision scheduled for Wednesday. As a result, they steered clear of risky investments.
Germany's inflation rate remained low in April, as anticipated. Meanwhile, in the eurozone, inflation displayed a similar trend. Although core inflation excluding price changes for energy, food, and luxury goods decreased, it did not deter economists from expecting economic growth. ING economists stated that the Eurozone would experience its fastest growth since the start of the energy crisis in the third quarter of 2022, suggesting the area was on the path to recovery. Despite moderate inflation, the experts from Pantheon Macro predicted the ECB's first interest rate cut in June, which would not be impacted by the inflation figures.
In general, major European trading venues experienced significant losses. The EuroStoxx 50, the leading index for the Eurozone, fell by roughly 1.2 percent. The French CAC 40 decreased by 1.0 percent, while the London Stock Exchange was mostly stable. Meanwhile, New York's Dow Jones Industrial fell around 0.9 percent during European trading.
Mercedes-Benz and Volkswagen recorded the greatest declines in the DAX, with share price losses of 5.2 percent and 4.6 percent respectively. A trader noted Mercedes-Benz's figures were worse than predicted. Volkswagen had also reported a decline in business development previously.
The euro traded at 1.0686 USD. The European Central Bank had set the reference rate at 1.0718 USD in the afternoon. The bond market yield increased from 2.57 percent the previous day to 2.59 percent. The bond index Rex slid by 0.13 percent, reaching 124.03 points. The Bund future lost 0.47 percent, ending at 130.15 points.
A trader commented on the situation, predicting that business numbers would continue to adversely impact the stock market over the near future. They warned that the impact from any positive news would be limited due to the current market volatility.
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Source: www.stern.de
