Status: 07/26/2021 12:10 p.m.
Price losses in China and a surprising clouding of sentiment in the German economy have made investors on the Frankfurt Stock Exchange cautious. Especially the car values are falling.
Affected by the four auto stocks, the DAX increased its losses in the morning. At times it fell to a daily low of 15,544 points after closing at 15,669 points on Friday. He can recover a little by noon. This means that the seasonal lull that has persisted since June continues. Although prices fluctuate, there is still a lack of momentum overall to push the leading index towards the record high of 15,800 points. New quarterly figures from large companies and the meeting of the US Federal Reserve on Wednesday should provide movement this week.
Today, the price losses on the stock exchanges in Hong Kong and Shanghai are proving to be a burden after the Chinese government unsettled investors with new regulations and bans. For example, companies in the education sector are not allowed to make a profit or go public.
The investors in Frankfurt then reacted disappointed to the weaker than expected, much noticed ifo economic index. The DAX expanded its losses and fell by 0.8 percent to 15,544 points after it had previously been 0.5 percent lower. In fact, the mood in German companies has surprisingly clouded over. The ifo business climate index fell in July to 100.8 points from 101.7 points in June. Economists had expected an increase to 102.1 points. “Delivery bottlenecks for preliminary products and worries about increasing numbers of infections are burdening the German economy,” said Ifo President Clemens Fuest.
It gets exciting after the US stock market closes in the evening. Then Tesla, one of the darlings of young investors, presents its latest figures. Since the beginning of the year, however, the electric car manufacturer’s papers have clearly lost value.
Euros only briefly to 1.18 dollars
The euro only managed to climb above the $ 1.18 threshold for a short time in the morning. The ifo economic index, which fell below expectations, ended the soaring of the common currency and pushed it back down to Friday’s level of 1.7770 dollars. The European Central Bank (ECB) had last set the reference rate at 1.1767 dollars.
Vonovia under pressure after failed takeover
Vonovia shares were one of the weakest stocks in the DAX in the morning. The housing company confirmed in the morning that the second takeover attempt by the competitor Deutsche Wohnen also failed. Instead of the required 50 percent, only 47.3 percent of the shareholders of Deutsche Wohnen would have accepted the purchase offer. Deutsche Wohnen’s investors are relieved to react and raise the share to positive territory.
Vonovia had already announced on Friday that the group was unlikely to be able to secure enough shares. The second attempt to take over Deutsche Wohnen has thus failed for the time being. Whether Vonovia will start a third attempt or make a new offer to shareholders initially remained unclear.
Auto values under pressure
Today, the DAX is primarily burdened by car stocks. The papers from Continental lose 2.6 percent as the bottom of the list. Daimler, Volkswagen and BMW follow with losses of 2.5 percent in some cases. According to experts, the reason is the acute lack of chips.
BMW has to interrupt car production at the Regensburg plant due to missing computer chip components. A one-week break is planned from today, as a spokeswoman said. After that, a holiday week was planned anyway, so production would resume on August 9th.
Ryanair deep red, but recovery in sight
The sluggish recovery of the travel business during the Corona crisis kept the low-cost airline Ryanair in the red in the past quarter. The bottom line was a loss of 273 million euros in the first quarter of the business year to the end of June, almost one and a half times as much as a year earlier. Ryanair boss Michael O’Leary expects a significant increase in passenger numbers in the summer, provided that increasing numbers of infections do not result in further setbacks in the flight business.
After more than five million passengers in June, the number of passengers is expected to reach almost nine million in July and more than ten million in August. For the current financial year until the end of March 2022, O’Leary expects a small loss or, at best, a result close to the zero line. The number of passengers is expected to reach 90 to 100 million. Previously, he had assumed around 80 million passengers.
Philips: Diagnostics drives business operations
A robust diagnostics business continues to provide the medical technology group Philips with a tailwind. Sales in the second quarter rose by six percent to 4.2 billion euros compared to the same period in the previous year. Adjusted operating profit (Ebita) increased by more than a third to 532 million euros. That was a little more than analysts expected. The bottom line was that Philips earned less because of additional provisions for a product recall. The net profit fell by more than a quarter to 153 million euros. The medical technology group was somewhat more cautious with the outlook and expects an improvement in the operating profit margin of 0.6 percentage points, which would correspond to the lower end of the previous range.
Bitcoin is approaching the $ 40,000 mark
Bitcoin is back in high demand at the beginning of the week: The cyber currency increases in the morning by up to 22.3 percent to 39,748 dollars, which is the highest level in almost six weeks. Last week, the price had fallen to its lowest level in a month.
TSMC is considering building a chip factory in Germany
Against the background of the rapidly growing demand for semiconductors, the Taiwanese chip manufacturer TSMC is considering building a factory in Germany. In addition to Germany, Japan is also being examined as a location for such a plant, CEO Mark Liu said at the annual general meeting that morning. If the considerations are implemented, TSMC strives to share the costs with the customers or the countries.