market report
Status: 03/04/2022 07:49 a.m
Reports of fierce fighting near a nuclear power plant in Ukraine have rattled markets. Investors fear nuclear fallout. The DAX is about to fall again.
After reports of fighting near Europe’s largest nuclear power plant, the DAX is threatened with the next slump. The broker IG assesses the 40 German standard values at the hour 1.7 percent lower at 15,430 points. It would thus undercut the low for the year of 13,669 points, which was set just yesterday, by more than two hundred points.
According to the local administration, a fire is said to have broken out when the Russian invasion troops attacked near the nuclear power plant near the southern Ukrainian city of Zaporizhia.
DAX losses already at over six percent
“Markets are concerned about the nuclear fallout. The risk is that there will be a miscalculation or overreaction and the war will prolong,” said Vasu Menon, investment strategist at OCBC Bank. Investors therefore shied away from the risk.
The day before, the leading German index had come under heavy pressure in the late afternoon and closed with a minus of 2.2 percent. Since Russia’s invasion of Ukraine, losses have now totaled a little over six percent.
Nikkei slump
Reports of fierce fighting near a nuclear power plant in Ukraine have already caused heavy losses on the Asian stock exchanges this morning. On the Asian stock exchange in Tokyo, the Japanese Nikkei, which comprises 225 stocks, fell by 2.2 percent to 25,985 points. The Shanghai Stock Exchange was down 0.9 percent and Hong Kong’s Hang Seng slipped 2.5 percent.
Oil prices jump
Meanwhile, renewed fears about Ukraine are causing oil prices to skyrocket. The price of a barrel of Brent jumped 0.9 percent to $111.47. A barrel of the US WTI variety costs 1.3 percent more at $109.02. Rising energy prices are fueling investors’ fears of stagflation, i.e. inflation combined with stagnating economic output.
Dow Jones and Nasdaq with losses
The specifications from the world’s leading stock exchange in New York are becoming less important in view of the new developments in Ukraine, but are also not designed to support the global stock markets. Geopolitical concerns caused price losses on the US stock exchanges in late trading.
The US standard value index Dow Jones fell 0.3 percent to 33,794 points. The tech-heavy Nasdaq fell 1.6 percent to 13,537 points. The broad S&P 500 lost 0.5 percent to 4363 points.
S&P sees increased bankruptcy risk for Russia
The Russian ruble remains under pressure on the currency markets. The US rating agency Standard & Poor’s (S&P) has further downgraded Russia’s creditworthiness from “BB+” to “CCC-” due to new western sanctions over the war against Ukraine. The rating is thus just above the category for insolvency.
Euro as cheap as it hasn’t been since summer 2020
The flight of investors to safe havens continues unabated. This strengthens the US dollar. In turn, the euro falls to $1.1011, its lowest level since June 2020.
The gold price continues to range at its elevated level of the past few days. An ounce of the yellow precious metal currently costs $1,935.
Daimler Truck and Hannover Re are included in the Dax
The truck manufacturer Daimler Truck, split off from the former Daimler group, and the insurer Hannover Re are promoted to the first stock exchange league. Admission to the DAX will take place on March 21st. The consumer goods group Beiersdorf and the energy group Siemens Energy have to give way. They are relegated to the MDAX.
RTL, Sixt and Siltronic soon in the MDAX
In addition, three other companies will soon be listed in the index of medium-sized stocks that were previously one league lower in the SDAX. These are the media group RTL, the car rental company Sixt and the wafer manufacturer Siltronic. The special software provider Compugroup, Hella, which belongs to the car supplier Faurecia, and the car dealer Auto1 have to make room for this.
Tesla: Gigafactory approval awaited
Approval from the state of Brandenburg is expected around eight months after the originally planned start of production at the Tesla electric car factory in Grünheide near Berlin. According to information from the German Press Agency, a positive decision is expected for Tesla, but also with many conditions.
Google stops advertising business in Russia
Google is suspending its ad business in Russia after the attack on Ukraine until further notice. The group informed the US broadcaster CNBC, among others, that advertising was affected both in the context of Internet searches and on the YouTube video platform. Previously, Google only blocked certain war-related ads.