European Investors Persistently Push Ahead in Dax Market
Market Report: A Rollercoaster Ride
On a Tuesday tumult, DAX surged by 0.9% to a peak of 13,948 points, and the EuroStoxx50 advanced 0.8% to 3,819 points, as Wall Street offered a much-needed boost after a soggy start of the week due to China's weak economic data.
A trader commented, "Certainly, the upward momentum continues." The downward pressure in the US last week sparked speculation that the US Federal Reserve (Fed) might ease its interest rate hike cycle, sending stock prices soaring. However, the disappointing retail sales and industrial production figures from China cast a shadow of concern over a potential waning demand in the world's second-largest economy.
"The specter of a serious energy crisis remains potent, as high inflation rates are deflating consumer purchasing power," said Thomas Gitzel, Chief Economist at VP Bank. Market professionals continue to gaze with apprehension at the German economy as the barometer of the Centre for European Economic Research (ZEW) for the assessment of the economy in the next six months drooped by 1.5 points to -55.3 in August, marking the second consecutive decline.
The Oil Slick
The perception of weakening demand, particularly in China, keeps the oil price in a nettlesome state. North Sea Brent crude fell by up to 2% to $93.20 per barrel. "Commodity prices are broadly under pressure as Chinese economic data for July revealed a weaker growth picture, rekindling concerns about demand prospects," said Yeap Jun Rong, Market Strategist at IG Group.
Individual stocks like Delivery Hero bucked the trend with a 14.4% price surge, leaving other MDax stocks in the dust. "The management's accomplishments in 2022 have given investors a reason to cheer," a trader remarked. Analysts forecast that the company will record a seven percent increase in gross merchandise value in the third quarter compared to the April-June period.
BHP Group, the mining giant, enjoyed an unexpectedly strong result and a record dividend, with its shares spiking up by 5% at the peak.
In an uncertain global economy, some sectors and companies are managing to find their footing amidst the upheaval.
- The upward momentum in the market, as seen in the DAX and EuroStoxx50, could be a tailwind for investors, despite the disappointing retail sales and industrial production figures from China.
- High inflation rates are causing concern, as they are deflating consumer purchasing power, potentially leading to a serious energy crisis.
- In the finance industry, the oil price remains in a nettlesome state due to the perception of weakening demand, particularly in China.
- Contrary to the market trend, individual stocks like Delivery Hero have bucked the trend with a significant price surge, highlighting the resilience of some companies in the technology sector during these uncertain times.
- Despite the challenging global economy, some companies, such as BHP Group in the industry of mining, have managed to enjoy strong results and record dividends, providing a glimmer of hope for investors.
