German stocks are experiencing significant gains. DAX is witnessing a decline, while Tesla's shares are escalating notably.
Yesterday, the stock market in the US brought some surprises: The American indices fought their way up and pushed the DAX, but not for long. SAP is currently bringing the DAX down, while Tesla is powering a massive rally, causing German stocks to rise overall.
The German stock market moved at different speeds on Thursday. Second and third tier stocks mostly recorded clear gains, while the blue chips struggled. Accordingly, the DAX inched up by only 0.13 percent to 15,101 points in the afternoon. The slow pace of the leading index is possibly due to significant losses in the heavily weighted SAP stock.
The MDax of medium-sized companies rose by 1.30 percent to 28,797.77 points. The SDax climbed by around 1.0 percent. The EuroStoxx 50, the leading index of the Eurozone, gained around 0.6 percent.
With a strong finish, the Dow Jones Industrial just managed to break into positive territory the evening before. The technology stocks of the Nasdaq made up for significant losses. Tesla's impressive quarterly report and robust data on economic growth brightened the mood on the tech-heavy Nasdaq exchanges on Thursday. However, the most famous Wall Street index, the Dow Jones Industrial, slipped into the loss zone after a promising trading start. It last fell by 0.23 percent to 33,665 points.
In contrast, the broad-based S&P 500 rose by 0.20 percent to 4,024 points. The Nasdaq 100 even rose by 0.87 percent to 11,918 points.
Stocks of interest for German investors
SAP stocks fell as the Dax's laggard, down 3.1 percent. The software maker set cautious financial targets for 2023 and is at the lower end of analyst expectations for revenue guidance. Our assessment of the SAP stock shows mixed signals due to these targets.
Sartorius shares rose 5.2 percent, making them the clear Dax leader. In early trading, they reached their highest level since mid-September. The pharmaceutical and laboratory equipment supplier expects a significant slowdown in growth for 2023 after another strong year. Analyst Odysseas Manesiotis of Berenberg Bank described the numbers as "solid" in an initial reaction. Our other important assessments suggest a positive outlook for Sartorius shares.
Evotec shares were the MDax's top performer with a 5.8 percent gain. The drug discovery company is partnering with pharmaceutical giant Johnson & Johnson to develop immune-based cancer therapies. In addition to research payments, Evotec will reportedly receive an undisclosed upfront payment and potential milestone payments of over $350 million and a revenue share if drugs from the collaboration make it to market.
Real estate company DIC Asset met its earnings targets last year. However, its operating profit, measured by the industry-standard metric funds from operations (FFO), was at the lower end of the given range. The company plans to pay its shareholders a dividend at the same level as last year. For 2023, the company expects a decline in earnings. Its shares rose by 2.1 percent.
Winners and losers in the DAX
At the top of the DAX, Sartorius' shares are up 5.89 percent following quarterly results. Infineon is benefiting from good numbers from its competitors and is up 4.11 percent. Fresenius Medical Care is also up 2.67 percent.
On the other hand, Fresenius is down 2.40 percent, RWE is down 1.66 percent, and Vonovia is down 1.28 percent.
What's important today
Investors are focusing on US Gross Domestic Product (GDP) data expected in the afternoon. Reuters-polled experts forecast a fourth-quarter increase of 2.8 percent annually, following a 3.2 percent gain in the summer quarter. Additionally, weekly initial jobless claims in the US are on the agenda. Investors hope to draw conclusions about the unemployment rate and thus the future monetary policy of the US Federal Reserve.
Among companies, earnings are expected from French luxury conglomerate LVMH. After market close, US companies Intel and Visa will also report.
- The slow pace of the DAX, Germany's leading index, might be due to significant losses in SAP stocks, a software maker that set cautious financial targets for 2023, causing analysts' expectations for revenue guidance to be at the lower end.
- In contrast to SAP, Sartorius, a pharmaceutical and laboratory equipment supplier, experienced gains, making it the clear leader of the DAX, with analyst Odysseas Manesiotis of Berenberg Bank describing Sartorius' numbers as "solid".
- Evotec, a drug discovery company, was the top performer in the MDax with a 5.8 percent gain, reportedly partnering with pharmaceutical giant Johnson & Johnson to develop immune-based cancer therapies and expecting potential milestone payments of over $350 million.
