FRANKFURT (dpa-AFX) – The German stock market is likely to take a breather after the latest winning streak on Tuesday. An hour before the start of Xetra, the X-Dax, as an indicator for the leading index, indicated an increase of around 0.2 percent to 14,343 points. Since its low for the year at the end of September, the Dax (DAX 40) has now recovered by more than 20 percent and is now at its highest level since the beginning of June. The Eurozone leading index EuroStoxx 50 (EURO STOXX 50) is expected to rise by around 0.2 percent on Tuesday.
Support came from Asia on Tuesday, where China’s trading hubs saw sharp gains, most notably Hong Kong. Measures to support the real estate sector give impetus. In addition, the Commerzbank experts referred to signs of relaxation in the relationship between China and the United States. At the G20 summit in Bali, the presidents of both countries, Xi Jinping and Joe Biden, expressed their desire to improve relations.
The German stock market could receive fresh impetus from the ZEW index of economic expectations. “If the ZEW balance of economic expectations improves today, fears about the economy will be reduced, but at the same time interest rate expectations will be underpinned. It remains to be seen how sustainable the optimism of market participants is,” explained the experts at Landesbank Helaba.
The publication of US producer prices for October in the afternoon should be interesting. These are the prices that manufacturers charge for their products. They are considered an indicator of future price pressure. Market participants will be watching for data to confirm the recently easing inflationary pressures in the US. Falling inflation is one of the central aspects for the US Federal Reserve, which means it may not be raising interest rates as much as recently. Lower interest rate pressures, in turn, help the stock market.
Among the individual stocks, the shares of ENCAVIS could be worth a look. The solar and wind farm operator continues to benefit from expanded generation capacities and high electricity prices. In the first nine months, sales increased by around 37 percent year-on-year. Adjusted for special effects, earnings before interest and taxes rose by around 45 percent. On the Tradegate trading platform, the Encavis shares rose by 2.7 percent compared to the Xetra closing price of the previous day.
The wind turbine manufacturer Nordex is meanwhile becoming even more pessimistic for the current year. Profitability (Ebitda margin) is expected to be around minus 4 percent at the lower end of the forecast corridor. In the first nine months of 2022, sales fell by 2.1 percent. In addition, an operating loss of 200 million euros was incurred. Nordex now needs a profit in the fourth quarter to even achieve the shortened outlook, a trader warned in an initial reaction in the morning. The Nordex papers fell on Tradegate by 5.1 percent.
Basler shares lost 2.9 percent on Tradegate. The private bank Berenberg downgraded the shares of the high-tech company from “Buy” to “Hold”. According to analyst Lasse Stüben, there are signs of lower growth in 2023. Initially, he sees little scope for an above-average price development of the shares./edh/mis