Market Moves on Christmas Eve
Delivery Hero struggles with coursework issue.
The German stock market maintained its stance during the final trading day of the festive week. In subdued trading, the Dax inched up by 0.2% to hit 19,888 points by midday Friday. Conversely, the MDax dropped by 0.1% to 25,688 points. The Euro Stoxx 50 posted a 0.4% increase.
Having peaked at over 20,500 points mid-December, the Dax entered a corrective phase. corporate profit-booking dominated towards year-end. The current uncertainty revolves around the US Federal Reserve's interest rate policy, incoming US President Donald Trump's economic policies, and China's expected economic recovery. Still, the German benchmark index's stellar annual performance, up nearly 19%, is impressive.
The spotlight was on Delivery Hero after Taiwan's fair trade commission nixed the Foodpanda sale in Taiwan. The company's shares dropped to their lowest since late August, down by 5%, in early trade. Uber intended to acquire the unit for about $1 billion, but the deal fell through. J.P. Morgan analyst Marcus Diebel dubbed the news a "clear negative" for the food delivery company.
HelloFresh shares received a late-minute boost of 1.6%, thanks to the meal kit provider's plan to repurchase another 75 million euros of its own shares. The buyback aims to offset dilution caused by employee participation programs in 2025.
Hornbach Holding will soon need a new CFO, as Karin Dohm will depart by March 31, 2021. CEO Albrecht Hornbach may assume the role on an interim basis if a smooth transition isn't ensured. The announcement led to a 2.5% rise in Hornbach shares.
On a related note, Covestro had to vacate the Dax for having less than a 10% free float. In the MDax, dialysis specialist FMC was promoted to the Dax, while real estate company Deutsche Wohnen, belonging to Vonovia, ascended from the SDax. LPKF joined the SDax afterward.
Holiday Trading Insights
Trading volumes typically decrease during holiday periods, leading to increased stock price volatility due to reduced liquidity. Sector performance can vary depending on factors like consumer spending trends for food delivery or online retail companies. Figures like Delivery Hero and HelloFresh may be influenced by holiday spending trends, while more niche markets like Hornbach Holding might experience less short-term volatility. Global economic trends and supply chain conditions could affect companies like Covestro, while real estate companies such as Deutsche Wohnen might exhibit less volatility during holiday periods compared to more cyclical sectors. LPKF, a technology company focusing on laser-based manufacturing solutions, might be sensitive to technological trends and industrial demand.
- Despite the year-end profit-booking and uncertainties regarding the US Federal Reserve's interest rate policy, incoming US President Trump's economic policies, and China's expected economic recovery, the German benchmark index, Dax, showed an impressive annual performance of nearly 19%.
- The shares of Delivery Hero dropped by 5% in early trade, seguing from a veto by Taiwan's fair trade commission on the Foodpanda sale in Taiwan and the fall through of the intended Uber acquisition.
- Hellofresh shares received a late-minute boost of 1.6%, attributed to the meal kit provider's plan to repurchase another 75 million euros of its own shares to offset dilution caused by employee participation programs in 2025.
- Hornbach Holding announced that Karin Dohm will depart as CFO by March 31, 2021, with CEO Albrecht Hornbach potentially assuming the role on an interim basis if a smooth transition isn't ensured, leading to a 2.5% rise in Hornbach shares.
- During the holiday periods, sectors like food delivery and online retail may experience increased volatility due to reduced liquidity, as demonstrated by figures like Delivery Hero and Hellofresh. Contrastingly, more niche markets, such as Hornbach Holding, might exhibit less short-term volatility, while real estate companies like Deutsche Wohnen might be less volatile compared to more cyclical sectors, and technological companies like LPKF might be sensitive to technological trends and industrial demand.
