Negative information from overseas weighed on the German stock market on Friday and caused it to slide below the round mark of 24,000 points.
The DAX opened with a heavy loss of 1.81 percent at 23,833.11 points and then temporarily widened its deficit somewhat.
Martin Utschneider, analyst at the broker Robomarkets, remains optimistic from a chart perspective: The current development is sobering, “but from a chart and market perspective, nothing dramatic has happened yet.” It now remains to be seen whether investors will buy the setback again with the clouded mood and the weekend just around the corner.
Record high is receding into the distance again
It was only on Thursday last week (October 9th) that the DAX set a new record high of 24,771.34 points. Ultimately, it ended that day at 24,611.25 units, which was also a new record based on the closing price.
US regulations burden – concerns about the US credit market
The US stock market slipped into the red on Thursday after the European market closed. The balance sheet quality of smaller regional banks frightened investors on Wall Street after two banks announced problems with loans – and is now also causing pressure to sell in this country. The regional banks Zions Bancorp and Western Alliance reported problems with borrowers and bad loans. Zions Bancorp announced a loss of more than $60 million and allegations of fraud against a group of investment funds. Those revelations sparked a broad selloff in bank stocks, resulting in the worst trading day for the sector since April. Traders say there are growing concerns about the US credit market. Although it is not a systemic credit collapse, it is a clear warning signal.
“The fear of a new crisis is back. And with the problems of the two regional banks, a new potential trigger for the crisis has emerged,” wrote portfolio manager Thomas Altmann from QC Partners, according to “dpa-AFX”. “Volatility at regional banks, combined with the recent collapse of subprime lender Tricolor Holdings, has investors questioning the overall health of U.S. credit markets,” said NAB foreign exchange strategist Rodrigo Catril, according to Dow Jones Newswires.
Investors are becoming more cautious
Just over a week ago, the Dax, driven by the AI boom, climbed to a record high of 24,771 points. However, the trade conflict between the USA and China, which flared up again, caused a correction. Since then, the German stock market barometer has been fighting against further declines. It should come as no surprise that investors are cautious, as the DAX has already risen by almost 22 percent over the course of the year as of Thursday’s close.
Planned Trump-Putin meeting for investors is just a side note
US President Donald Trump’s recent efforts to end the Russian war of aggression should be seen as positive. For Folker Hellmeyer, chief economist at Netfonds, the chance of ending the conflict at least seems more tangible. Putin and Trump spoke by phone two and a half hours before Trump’s meeting with Ukrainian President Volodymyr Zelensky on Friday. Trump spoke of great progress. A summit between Putin and Trump was arranged in Budapest. For investors, this is just a side note at the end of the week.
Editorial team finanzen.net / dpa-AFX / Dow Jones Newswires