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Market Report: DAX Launches Another Recovery Attempt

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market report

Status: 05/07/2022 07:25

Recession fears and fears of running out of gas continue to keep the German stock market in check. Despite their failure yesterday, the DAX bulls still dare to come out this morning.

The DAX should start XETRA trading with a strong premium. Broker IG estimates the 40 German standard values ​​higher by 0.9% at 12,887 points. This is the next attempt to stabilize the DAX.

The day before, the first German index had already begun an attempt to rise towards the 13,000 point mark. But without Wall Street being closed for the holidays, the DAX bulls ran out of steam quickly. The DAX eventually had to give up all of its initial gains during trading and closed down 0.3% at 12,773 points.

Main DAX brands in the spotlight

A rise above yesterday’s daily high of 12,920 points would now open the door towards the DAX’s 13,000 point mark. Below, it is still important to note the three-month low of 12,619 points marked the previous week. It acts as a key support above the yearly low (12,439 points).

The gas crisis is the sword of Damocles for the stock market

At the same time, risks to corporate earnings remain high. Many market watchers fear that aggressive central bank interest rate policy, combined with a gas crisis in Europe, could trigger a recession.

“The looming gas crisis in Europe, but especially in Germany, hovers over the Frankfurt Stock Exchange like the sword of Damocles,” said analyst Jochen Stanzl of CMC Markets. The fear of an emergency is too great if Nord Stream 1 does not return to service after scheduled maintenance work at the end of the month.

Nikkei up, Shanghai down

Inconsistent specs come from Asian exchanges in the morning. While the Japanese Nikkei index, which includes 225 stocks, was up 0.9% shortly before the close in Tokyo, the Shanghai stock market fell 0.2%. The tailwind for markets comes from new economic data out of China: according to the Caixin Purchasing Managers’ Index, the services sector there grew faster in June than it did in nearly a year.

Gold Remains Clear Above $1800

An ounce of gold is worth $1811 at the start of the session. The yellow precious metal can thus further widen its gap to the $1,800 mark, which it only recently regained. The Euro is moving sideways at $1.0435.

The government wants to create a “protective shield” for Uniper & Co

Among individual stocks on the German stock market, the focus is again on the Uniper share. In the gas crisis, the federal government wants to create a “shield of protection” for energy companies in difficulty. The legal changes aim to create the conditions for the federal government to invest in companies like Uniper.

Delivery Hero Completes Glovo Acquisition

Spanish competitor Glovo is now owned by delivery service Delivery Hero. MDAX Group announced that all steps to complete the transaction have been taken. All that remains is to proceed with the increase in the share capital and the subsequent admission of the shares to trading. After that, Delivery Hero will hold 94% of the Spanish group’s shares.

Encavis boss Paskert quits

The operator of solar and wind farms Encavis is reorganizing its board of directors for the European energy transition. The boss of the company, Dierk Paskert, will resign from his functions on December 31, 2022 and “will leave the group prematurely by mutual agreement”, announced yesterday the company MDAX after the close of trading. CFO Christoph Husmann will be appointed spokesperson for the Management Board on January 1, 2023, thus maintaining the continuity of the basic commercial orientation.

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Source www.tagesschau.de

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