FRANKFURT (dpa-AFX) – At the start of the stock market month of March, the escalation in the Middle East is likely to weigh on the mood on the stock markets. After a slight increase in the first two months of the year, the DAX will probably initially give way on (DAX) Monday and slip back below the important mark of 25,000 points. The broker IG estimated the clear leading index at around 1 a.m. on Monday at around 24,960 points, 1.3 percent below the level on Friday.
The record high of 25,507 points, which was still within reach last week, is likely to be lost sight of for the time being. Before the weekend, some analysts such as the experts from Index-Radar had expected that new records could follow at the beginning of March. As a result, they even considered a further advance towards 26,000 points to be possible in March, which is also considered a good trading Monday.
However, the prerequisite for this would have been that there were no geopolitical disruptive factors. But with the killing of Iran’s Supreme Leader Ayatollah Ali Khamenei in American-Israeli air strikes at the weekend, this is exactly what happened. The Iranian Revolutionary Guards have responded with attacks on US bases in the region as well as Israel’s army headquarters and a defense complex in Tel Aviv.
The biggest direct economic consequence is likely to be higher oil prices in the short and medium term. In the first minutes of trading of the week, these rose by double digits. Because of the attacks on Iran by the United States and Israel, supplies from the oil-rich Islamic Republic could stop in the near future. However, a far more important factor in the risk of rising oil prices is the situation on the Strait of Hormuz.
Around a fifth of global oil shipments are shipped through this strait between Iran and Oman every day. According to an Iranian news agency, Iran’s Revolutionary Guards have restricted shipping traffic in the Strait of Hormuz after attacks on Iran began. According to government information from Oman, an oil tanker was attacked in the area of the strait.
Eight oil producing countries reacted at the weekend and want to increase their production volumes from April onwards significantly more than analysts and experts originally expected. Overall, daily production will increase by 206,000 barrels (159 liters each), as the core group of the OPEC+ oil cartel announced on Sunday afternoon after an online meeting.
The group, led by Saudi Arabia and Russia, made no mention of the recent war in the Middle East. Instead, the increase in production was explained by the stable outlook for the global economic situation and low oil inventories. The OPEC+ states could compensate for shortfalls from Iran, but they do not have enough free production capacity to make up for a Hormuz blockade, Commerzbank analysts warned shortly before the start of the latest escalation.
At the end of last week, Baader Bank expert Robert Halver believed that further price fluctuations were possible due to interest rate fantasy, geopolitics and tariffs, depending on the news. However, he believes that short, sudden price setbacks create favorable entry opportunities in the longer term. The 25,000 point mark, which provided support in the second half of February, is likely to remain particularly important on the downside.
“Despite the current risks – customs chaos, Iran, AI fears – the stock markets worldwide are showing resilience,” wrote Baader Bank expert Halver. Although these issues left their mark on the investor psyche and the pessimists were gradually taking over on the US stock market, this is precisely what speaks against significant correction potential.
Halver recently observed that European stocks are being rediscovered in the global environment through a change of heart. “The long-lasting AI euphoria has now given way to disillusionment,” he wrote. In recent years, the US stock exchanges in particular have had AI fantasy to offer, but now Europe’s “tech abstinence seems like a welcome break from worries.” The Eurozone leading index EuroStoxx 50 repeatedly set records in February, while the record set by the US technology index NASDAQ 100 is already four months old.
Chief strategist Robert Greil from private bank Merck Finck recently remained positive about stocks on a global level, not least because the economic trend remains upward. On this point he expects a lot of new impressions in the coming week, especially from the next US labor market report, which is expected on Friday. Before that, however, purchasing managers’ indices from the ISM institute could become relevant on Monday and Wednesday.
“What will be important for the US Federal Reserve in the labor market report is whether the good trend from January is confirmed in February,” mentioned Greil. This would then be relevant for investors because it would further dampen interest rate cut fantasies. Andreas Hürkamp from Commerzbank expects only 60,000 new jobs in the USA in February after 130,000 in January. The persistently weak job growth argues for three interest rate hikes by the Fed over the course of the year. However, only two are considered priced on the market.
In Germany, further impetus could come from the reporting season over the course of the week, which continues with a large number of DAX stocks. Mentioned are Beiersdorf on Tuesday and adidas, Bayer, Continental and Symrise on Wednesday.
Figures from Merck and DHL (DHL Group (ex Deutsche Post)) are also expected on Thursday. Lufthansa, a potential DAX returnee, rounds off the week on Friday. In the USA, Nvidia’s competitor (NVIDIA) Broadcom could come into focus on Wednesday./tih/la/he/zb/he
— By Timo Hausdorf, dpa-AFX —
