market report
Status: 12/27/2022 4:24 p.m
With calm trading, the DAX maintains its positive position. Hope comes from China, where the government’s easing of corona measures immediately sparked imagination.
When business is quiet, the DAX continues its recent interim recovery “between the years” and peaks at around 0.7 percent in the afternoon. However, the leading German index is currently falling and has fallen below the 14,000 point mark after Wall Street opened more easily. However, the fluctuations and sales are manageable, the index has so far fluctuated between 13,966 and 14,063 points.
“Many market participants are on Christmas vacation and have already closed the books for the stock exchange year 2022,” says analyst Jochen Stanzl from the online broker CMC Markets. In addition, the largest European trading place, the London Stock Exchange, is closed today.
Rapid recovery possible in China
Meanwhile, the corona development in China provides a friendly undertone. Because the Chinese authorities had surprisingly heralded the end of the controversial zero-Covid policy this month after nationwide protests. In addition to numerous other measures, the entry regulations have now also been relaxed: From January 8, there will no longer be a quarantine requirement when entering China.
Although virologists are now warning of high numbers of infections and deaths, confidence prevails. Because the strict isolation policy has slowed down the economic development of the second largest economy in the world, which had increased global economic concerns on the stock exchanges.
“This is certainly something that traders and investors have been hoping for for a long time,” said Naeem Aslam, chief market analyst at brokerage firm AvaTrade. “This is another important step in China’s reopening, especially to the rest of the world, despite the recent increase in local infections,” said JPMorgan analysts.
Wall Street down
Unable to hold on to China premarket gains, US stocks open lower after ending last week’s gains. The dominant interest rate issue in New York continues to weigh on the markets, with the interest-sensitive tech exchange Nasdaq being particularly affected. She loses around 1.3 percent.
Although the Federal Reserve (Fed) wants to reduce interest rates somewhat, there can be no talk of an end to the current interest rate cycle, which means that uncertainty keeps arising. There are only economic data from the second row, they also offer no surprises.
The euro slips slightly back into the red
The European common currency cannot initially defend higher gains of up to 1.0669 dollars and is currently trading slightly in the red again at 1.0624 euros. On the foreign exchange market, interest rate hikes by the US Federal Reserve are expected to slow down overall, which will weaken the greenback.
In addition, the foreign exchange market is also looking to China. “A faster end to the Covid restrictions would support the Chinese economy and benefit the eurozone and the euro,” said Danske Bank’s strategists. According to a Reuters survey, German companies expect only a slight recession next year, despite the headwind from the energy crisis, the shortage of raw materials and a sluggish global economy.
Mild recession in Germany?
“The last quarter of 2022 and the start of 2023 are likely to be accompanied by declining economic activity,” said the President of the Federation of German Industries (BDI), Siegfried Russwurm, in a survey of large associations published by the Reuters news agency on Tuesday. “But we only expect a slight slump.” However, growth will be rather restrained until 2024.
Oil prices remain high
The further easing of the corona restrictions in China is driving the oil price to its highest level in three weeks. China is one of the largest oil consumers in the world.
The fear of supply bottlenecks due to the winter storms in the USA is also causing the price to rise. Brent crude oil rose 0.7 percent to $84.22 a barrel. The price of US WTI light oil rose 0.7 percent to $80.06 a barrel.
Auto values in the DAX in front
Papers from Porsche Holding are among the domestic individual stocks at the top of the DAX, and other car stocks are also up. According to traders, they will benefit in particular from the hoped-for easing in China, which should improve the Chinese consumer mood again. Most of the 40 DAX stocks are up, there are slight losses at the end of the index for Infineon.
China profiteer Lufthansa
Lufthansa papers in the MDAX are also benefiting from the China hopes, rising a good one percent to over eight euros. Officially, there are no restrictions on Chinese traveling abroad, but the new rule should make it much easier for them to return home. The immigration bureau said Tuesday China will resume issuing visas to mainland Chinese residents traveling abroad from Jan. 8.
… before agreement in Italy
In the negotiations for the purchase of a minority stake in the Italian airline ITA Airways, according to a media report, Lufthansa is aiming for an agreement in principle before the end of this year.
According to the newspaper “Il Messaggero”, the German airline has accepted all the conditions imposed by the Italian government for strategy and corporate governance at ITA Airways. According to the newspaper, Lufthansa intends to subscribe to a capital increase of 200 to 250 million euros for its entry into ITA. Lufthansa should initially hold a share of 35 percent, which should then be increased over time.
Luxury stocks in demand
The announced lifting of the quarantine requirement for travelers to China from January 8th has investors turning to European luxury stocks. The prospect of shopping tourism picking up again is pushing the luxury groups LVMH and Kering in Paris by around two percent. The shares of the Italian manufacturer of luxury jackets Moncler are also up by almost two percent.
Siemens Energy in demand
Siemens Energy shares are up around two percent, making them one of the biggest winners in the DAX. The former Siemens subsidiary had announced before the long Christmas weekend that it would start buying back shares on January 2 in order to issue shares to employees and board members as part of compensation and employee share programs. The maximum value of the share buyback is therefore 130 million euros.
Uniper has to leave SDAX
The gas importer Uniper has to leave the SDAX of the small caps after being rescued by the state. As of today, the fuel cell manufacturer SFC Energy can be found in the index. The shares of SFC Energy continue their positive run of the past trading days and gain around two percent.