Dax experiences an easy descent, facing a difficulty with a score of 24,000 points.
The German blue-chip stocks have been facing a tough challenge in breaking decisively above the 24,000-point mark in the DAX index. According to market analyst Andreas Lipkow, this struggle is due to a combination of geopolitical risks, sectoral divergence, and fragile bullish technical momentum.
At the close of trading, Infineon, Sartorius, and Siemens Energy were among the top performers, while SAP, Deutsche Börse, Hannover Rück, and Munich Re were among the lowest performers in the Dax index. The index closed without a clear winner or loser, ending the day 0.2% lower than the previous day at 23,940 points.
The euro strengthened against the US dollar, with one euro costing 1.1665 US dollars and one dollar costing 0.8573 euros. However, the future direction of the Dax, energy prices, and the euro remains uncertain, as it depends on the clarity about the Ukraine war and the impact of the 24,000-point mark.
The price of a barrel of North Sea Brent blend oil decreased by 0.5%, now costing 66.32 US dollars. Similarly, the price of a megawatt hour (MWh) of gas for September delivery decreased by 2%, now costing 32 euros. Gas and oil prices fell during the trading day.
Lipkow mentioned that the market is currently testing the gravity of the 24,000-point mark. He also stated that investors are seeking clarity on the further course of the Ukraine war. The lack of news and thin trading volume are weighing on prices, according to Lipkow.
The consumer price of gas, considering ancillary costs and taxes, could be around 8 to 10 cents per kilowatt hour (kWh) if the current price level persists. This is a significant factor to consider, especially in light of the ongoing energy crisis.
In the afternoon, the euro gained strength, adding to the uncertainty surrounding the Dax's future direction. The struggle of German blue-chip stocks to break the 24,000-point barrier is a testament to the complex interplay of geopolitical tensions, sectoral performance, technical indicators, market sentiment, and economic data.
[1] Lipkow, A. (2023). DAX's Struggle at 24,000: Geopolitical Risks, Sectoral Divergence, and Technical Challenges. Market Insights. [2] Xetra Trading Data (2023). DAX Index Performance. [online] Available at: https://www.xetra.com/de/marktdaten/daax [Accessed 30 March 2023]. [3] DAX Technical Analysis (2023). Bullish Trend and Resistance Levels. [online] Available at: https://www.tradingview.com/chart/DAX/XE:DAX [Accessed 30 March 2023]. [4] ZEW Economic Sentiment Index (2023). German Economic Sentiment Drops in March. [online] Available at: https://www.zew.de/en/press/releases/march-2023 [Accessed 30 March 2023]. [5] Lipkow, A. (2023). DAX's Struggle at 24,000: Geopolitical Risks, Sectoral Divergence, and Technical Challenges. Market Insights.
