market report
Strong price losses on the US technology exchange are also dampening sentiment here. Investors remain cautious ahead of a hearing by US Federal Reserve Chairman Powell before the US Congress.
Stock market trading is unlikely to start with much movement today: before Xetra trading begins, broker IG estimates the DAX a few points higher at 17,720 points. Yesterday, the leading German index, which had recently reached seven record highs in a row, closed 0.1 percent lower at 17,698 points.
Ulrich Stephan, chief investment strategist for private and corporate customers at Deutsche Bank, takes a positive look at the leading German index on the occasion of the current reporting season: the DAX companies generate over 80 percent of their sales outside Germany, according to the expert.
“The falling energy costs, which have fallen by more than 60 percent since the beginning of 2023, as well as the robust growth prospects for China and the USA, the most important export countries for the DAX companies, support the development of the index,” writes Stephan in his daily outlook
But in addition to corporate news, monetary policy remains a crucial factor in price development. Investors remain cautious ahead of Federal Reserve Chairman Jerome Powell’s testimony before Congress: “It seems unlikely that Powell will change the message that he and his colleagues have been saying recently, namely that they are in no hurry to cut interest rates, and that they want more certainty that inflation is under control before they do so,” the ING economists wrote.
“If the Fed chief questions the interest rate cut in June, this could well become a show-stopper for the stock markets,” warned analyst Jochen Stanzl from broker CMC Markets.
After the recent record rally on the New York stock exchange, investors cashed in yesterday. The market also said that concerns about excessive valuations in the technology sector were growing. This led to increased profit-taking on the Nasdaq stock exchange, which sent the Nasdaq 100 selection index plummeting by 1.8 percent to 17,897 points. It had gained up to 30 percent since its October low.
Investors also withdrew on Wall Street and the broader US market for the time being. The Dow Jones Industrial fell by 1.0 percent to 38,585 points. The S&P 500 also lost 1.0 percent to 5,078 points.
The Nikkei index, which includes 225 values, closed at 40,090 points, practically at the previous day’s level. “After the steep rally since the start of the year, we now appear to have entered a phase of accelerating,” which is expected to last until the Bank of Japan (BOJ) and Fed meetings next week, said Nomura’s Kazuo Kamitani Securities. “By then the market will be bottoming out,” and unless the Nikkei falls well below 39,000, it will be a sign of an extremely strong market,” he said.
The Shanghai stock exchange gained 0.1 percent. The index of major companies in Shanghai and Shenzhen gained 0.1 percent.
After record years due to the boom during the Corona crisis, the logistics giant DHL has to cope with significant declines in sales and profits. Deutsche Post, which has been operating under the name DHL since last year, recorded a decline in operating profit (EBIT) to 6.3 (8.4) billion euros in 2023, with a decline in sales to 81.8 (previous year: 94.4) billion euros.
Deutsche Lufthansa has to wait for a return to the DAX. The regular review of the most important German stock market indices revealed no changes in the league of the 40 largest German stock market stocks, Deutsche Börse announced. This means that the online fashion retailer Zalando, which was considered the first candidate for relegation, can maintain its place. Lufthansa was expelled from the DAX in 2020 in the wake of the Corona crisis, in which the airline had to be supported by the state.
With the success of its new smartphone Mate 60, the Huawei Group is taking market share from Apple’s iPhone, among others. According to calculations by the analysis firm Counterpoint Research, Huawei sold 64 percent more smartphones in the first six weeks of this year than in the same period last year. iPhone sales, on the other hand, were 24 percent lower.