FRANKFURT (dpa-AFX) – The Dax continues to wrestle with the much-noticed mark of 14,000 points at the beginning of the stock market year. On Monday afternoon, the German leading index claimed a plus of 0.83 percent to 14,039.70 points. It shook off the weakness at the end of last year for the time being, but remained within the range of 13,800 and 14,200 points seen in the past few weeks. In 2022, the Dax had lost almost twelve percent in view of the Ukraine war, high energy prices, high inflation and rising key interest rates to combat them – it was the weakest year since 2018.
Investors were now waiting “for a better stock market year in 2023,” wrote market observer Thomas Altmann from QC Partners. However, the economic and political risks and stress factors are still there. Stephen Innes of SPI Asset Management pointed out that the reasons for the high inflation are still valid. He pointed to key events throughout the week, including Wednesday’s Federal Reserve Board meeting minutes and Friday’s US jobs report. Meanwhile, analyst Jochen Stanzl from broker CMC Markets sees less inflation than the risk of a recession as a burden in 2023.
Irrespective of this, the other indices were also able to pull themselves together on Monday: For the MDax of medium-sized German companies, which had even collapsed by around 28 percent last year, went up by 1.31 percent to 25,447.79 points. The EuroStoxx 50 gained 1.22 percent to 3839.98 points – in 2022 the leading eurozone index had developed weakly like the Dax. Since, in addition to Wall Street, which sets the tone, the stock exchanges in Great Britain, China, Hong Kong and Japan, among others, remain closed, trading was relatively calm and with little volume.
Purchasing manager indices were on the agenda on Monday. Over the weekend it became known that the mood among China’s large and state-related companies had deteriorated even more in December than experts had expected. The background could be the fear of possible consequences of the Chinese government’s new corona policy. This reversed at the beginning of December after, unlike almost all other countries, it had initially not eased its already unusually strong zero-Covid policy. However, the number of infections in the country is now increasing rapidly.
Purchasing manager indices from the euro zone followed on Monday morning. Assuming this, the mood in industrial companies in the currency area continued to improve at the end of the past year. With an index value of less than 50 points, the indicator of the euro zone is still signaling a shrinking economic output.
At first there was hardly any company news from Germany. Rheinmetall (Rheinmetall share) thanks to a major order, continued the strong previous year: With a plus of 2.4 percent, the share of the armaments group and car supplier is one of the better MDax values. Last year, the focus was on the arms business, which was boosted by higher defense spending in the wake of the Ukraine war. But now the group has received an order worth more than a quarter billion euros from a German premium car manufacturer for switching protection parts in electric cars. Last week, Rheinmetall reported an order worth 770 million euros from industrial customers for refrigerant compressors – also an order from the non-utilized area of a group.
The index neighbor Verbio was also in demand on the first day of trading in 2023 after the good previous year, as the price increase of 2.9 percent was displayed. The authors of the market letter “Bernecker-Daily” think it is possible that the biofuel manufacturer will follow the example of the biogas plant specialist Envitec in January, which recently announced higher revenues and a higher pre-tax result than previously for 2022. In addition, Verbio is a beneficiary of the new gas price cap, since the company is also dependent on natural gas as an energy source. This is consistent with the report that the European gas price at the start of the year has usually dropped as it has in recent trading days thanks to unusually mild winter temperatures. Against this background, the Bernecker experts consider Verbio’s course correction of almost 31 percent since the November high to be exaggerated.
The laboratory supplier Sartorius , whose shares had already been among the biggest Dax losers in 2022, lost another five percent at the end of the index. The Göttingen-based company wants to make acquisitions again in the coming years. At the weekend, company boss Joachim Kreuzburg also told the German Press Agency that the shortage of skilled workers had meanwhile expanded into a labor shortage, which is also a challenge for Sartorius.
On the other hand, other losers of the past year were in the favor of investors on Monday, such as the price gains of the automotive supplier and tire manufacturer Continental (Continental share) of the online fashion retailer Zalando and the real estate group Vonovia showed in the leading German index. On the other hand, there was less demand for the 2022 takeover of a strong reinsurer Munich Re and Hannover Re (Hannover Re share) ./gl/jha/
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