The escalation in the Middle East also had a significant impact on the mood on the stock markets on Tuesday. The DAX is trending lower and temporarily slips below an important mark.
The DAX started Tuesday trading 1.75 percent weaker at 24,207.44 points. After that, it remains in deep red territory and in the meantime increases its losses so significantly that it not only falls below the 24,000 mark, but much further. The daily low is now 23,603.77 points (-4.2 percent).
This means that the leading index is moving away from its record, although experts had even considered an advance towards 26,000 points possible in March before the escalation in the Middle East conflict.
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.
War in the Middle East could last longer
According to US President Trump, the USA wants to significantly increase its attacks in Iran. “We haven’t even started hitting hard yet,” he told CNN. “The big wave is coming soon.” He assumes the war will last around four to five weeks. If necessary, it could take longer. According to him, Iran would soon be able to hit US territory with its missiles.
The continued military operations by the USA and Israel against Iran had already put a strain on the stock markets in the Far East on Tuesday and had resulted in some significant price losses in the region – although their US counterparts had not shown a strong downward trend the evening before, as had been feared on the market.
Oil prices continue to rise
The fact that oil prices continue to rise is causing significant headwind on the trading floors.
Investors are still concerned about an energy crisis. The attacks by the USA and Israel on Iran’s military infrastructure continued overnight and, conversely, Tehran responded by attacking targets in the Gulf states, among others. “The military escalation in the Middle East increases the risks for the global economy and the Financial markets significant,” wrote NordLB’s experts this morning.
The Strait of Hormuz as an oil and gas route is of central importance, but so is the duration and intensity of the dispute. “The longer the interventions last and the further the attacks spread to other countries in the region, the higher the risk of a real, stressful event for the capital markets,” wrote the NordLB experts. At Commerzbank, inflation risks are again being pointed out in view of rising oil prices.
Editorial team finanzen.net / dpa-AFX / Dow Jones Newswires
