After the setback the previous day, the DAX was able to stabilize before the weekend. The Middle East conflict remained the dominant topic on the stock exchange.
At the opening of Friday’s session, the DAX recorded a marginal increase of 0.09 percent to 23,827.54 points and was able to move into the profit zone as it progressed. He managed to break through the 24,000 point mark at times. At the close of trading, however, it gave up its gains and then entered the weekend 0.01 percent weaker at 23,803.95 points.
Oil prices hardly moved
Despite the fragile ceasefire in the Middle East, there has so far been no new pressure from oil prices, which are currently the most important indicator of inflation and economic concerns on the market. The price for a barrel of North Sea Brent remains well below $100, after falling to almost $90 on Wednesday after the ceasefire was agreed. Around $96 had to be paid on Friday.
Meanwhile, inflation in the US rose 3.3 percent in March. An increase of 3.4 percent was expected.
Trump’s criticism of Iran
US President Donald Trump criticized Iran’s “very poor job” in the agreed opening of the Strait of Hormuz – a lifeline for world trade. Trump was referring to reports that the country was charging tankers fees for transit. Meanwhile, Israel continues to attack positions of the pro-Iranian Hezbollah militia in Lebanon.
Possible negotiations in Pakistan
“The attention is now on possible negotiations in Pakistan, which are expected to take place at the weekend,” wrote bond expert Hauke Siemßen from Commerzbank, with a view to the warring parties in the Middle East. Among many factors, the success of a lasting ceasefire will likely depend on Israel’s actions in Lebanon. The latest news here indicated a willingness to negotiate.
Weekly outlook for the DAX
After the agreed ceasefire in the Iran war, investors’ hopes are now focused on positive negotiations between the USA and Tehran. The focus of interest is now the planned talks between delegations from the USA and Iran in Pakistan’s capital Islamabad, wrote market analyst Timo Emden from Emden Research and continued: “Investors are hoping for the big hit and thus for a lasting peace between the warring parties.” The markets continued to cling to any sign of relaxation.
However, Emden believes that uncertainty is likely to remain high. If the negotiations collapse or a solid ceasefire is not reached, this is likely to catch many investors off guard. “The markets are currently not prepared for another escalation,” warned the expert.
Asset manager Ortay Gelen from Axia Asset Management advised sobriety: “What we have here is not peace – it’s a breathing space. And as of today – that doesn’t last completely.”
According to Gelen, what will move the DAX in the new week depends on three questions: Are the negotiations in Islamabad making progress? Is Iran keeping the Strait of Hormuz open? Where does the oil price settle?
The latter is not a minor matter for the DAX, the expert continued: “A crude oil price below 90 US dollars would be a clear signal that inflation fears are subsiding – that would open up scope for interest rate cuts and provide structural support for stocks.” However, if the price climbs back above $100 because the situation escalates, things will get tight.
DAX record last in January
On January 13th, the DAX reached an all-time high of 25,507.79 points, exceeding the 25,500 point threshold for the first time in its history. Ultimately, it ended the day at 25,420.66 points, which was a new record based on the closing price.
Evelyn Schmal, Melanie Schürmann, Martina Köhler, Bettina Schneider, finanzen.net editorial team with material from dpa-AFX and Dow Jones Newswires
