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Market report: stock markets remain on track to recover

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market report

Status: 07/20/2022 07:34

The stock market is still in a positive mood. In early trading, the DAX is expected to continue its uptrend from yesterday. Good guidelines from the United States and hope for gas deliveries are helping.

At around 13,400 points, 0.7% higher than at the close of yesterday’s session, the main German index should start according to pre-market indications. The bar of 13,000 points, which was regained only yesterday, is therefore clearly defended.

Will Russian gas flow again tomorrow?

Hopes of a resumption of Russian gas supplies via the Nord Stream 1 gas pipeline boosted the German stock market. Several reports indicate that Russian gas supplies are expected to resume tomorrow after maintenance work is completed. Kremlin chief Vladimir Putin, however, warned Europe against a further reduction in deliveries. If Russia does not recover a turbine for the Baltic Sea gas pipeline that has been repaired in Canada, the pipeline’s daily throughput capacity could still drop significantly by the end of July, Putin said.

US stock markets with a strong wind of support

On Wall Street, indexes also rose in the evening due to mostly good corporate earnings figures during the reporting season. The US Dow Jones Standard Value Index closed up 2.4% at 31,827 points. The tech-heavy Nasdaq rose 3.1% to 11,713, while the broad S&P 500 rose 2.8% to 3,936. Investors also reacted with relief to the surprisingly high number of building permits in the USA. So far, there are no signs of a recession, said analyst Jochen Stanzl of online broker CMC Markets. “So far it has only happened in people’s heads or only happens with a time lag.”

Asian markets clearly in the positive

In Asia too, prices rose sharply in the morning. The Japanese Nikkei index was 2.4% higher at 27,596 points. The broader Topix index rose 2% to close at 1,940 points. The Shanghai Stock Exchange rose 0.7%. The index of large companies in Shanghai and Shenzhen gained 0.7%.

The euro suffers a sharp rise in interest rates

On the currency market, the euro moved further away from parity with the dollar this morning. The common currency is currently trading at $1.0245. Investors are speculating that the European Central Bank (ECB) could raise interest rates by 0.5% tomorrow.

Stable oil prices

The price of oil stabilized in the morning at the level reached yesterday. A barrel of Brent North Sea is currently trading at $103.70. Prices rose sharply yesterday on hopes of an economic recovery. One troy ounce of gold is still trading at $1711.

Netflix with a good surprise

Better than expected figures from the video streaming service Netflix had boosted the technology sector in the evening. Netflix did not do as badly as expected in the second quarter thanks to hit series. The number of users fell by 970,000 paid subscriptions in the three months to the end of June. The drop in customer numbers continued, but remained below the minimum of two million subscriptions expected by Netflix itself. The stock rose 8% in after-hours trading.

BASF approves a site in China

The chemical group BASF has given its final approval for the construction of the planned Zhanjiang Verbund site in the southern Chinese province of Guangdong. BASF intends to invest up to ten billion euros in the construction of the new site by 2030. In 2020, BASF began construction of the first factories at the planned Verbund site in Zhanjiang, which will be the third largest site in Verbund of BASF to the world after Ludwigshafen and Antwerp. The site will be built in phases and should be fully operational by 2030. From the new site in Zhanjiang alone, BASF expects sales of four to five billion euros by 2030.

State entry into Uniper is imminent

According to circles, energy company Uniper’s bailout is up to the job. The agreement with the German federal government could be concluded in the coming days, the Bloomberg news agency reported last night with reference to people in the know. The federal government could then hold a blocking minority of up to 30% in Uniper. Germany plans to invest more than €5 billion in Uniper, with the total commitment expected to be less than €10 billion.

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Source www.tagesschau.de

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