Stock Markets' Midday Rally
Dax persists in his ascent.
As the week commenced on a high note, German stock indices kept soaring on Tuesday. The Dax surged by 0.3%, touching 20,279 points midday, edging above the 21-day line for an upward short-term trend, which had been wavering in the early trade. The record high of 20,522 points is still within reach. The MDax recording a 0.5% increase to 25,829 points, while the Euro Stoxx 50 climbed by 0.5%, trading above the 5,000 point mark, its highest level since mid-October.
Market mavens are still on the hunt for pocket-friendly investments in some undervalued German cyclical sectors, hoping for an expeditious resolution to the US trade saga according to the commodity pundit Andreas Lipkow.
No Major Surprises with Euro Inflation
A report suggesting that the Trump administration plans to impose tariffs on goods from all countries but restrict them to critical imports, published in the Washington Post, fueled market sentiment early in the week. Despite a denial from the incoming US President, investor sentiments remained largely unaffected.
On Tuesday, Eurozone's inflation data came under scrutiny, but disappointments were few and far between. Consumer prices inched up by 2.4% year-on-year in December, right in line with the predictions from economists. The third consecutive increase, while not ideal, probably won't win the ECB a smile since they had anticipated a bumpy inflation trajectory. The next ECB meeting is set for January 30.
Positive Shift for Beiersdorf and Kion
Shares of Beiersdorf turned bullish after an initial downtick, soaring by 1.5%. Speculations about optimistic statements from US competitor Ulta Beauty from the previous evening might have acted as a catalyst.
rackets speculation that Mercedes-Benz may abandon its 14% profit target weighed on its shares, which plummeted by as much as 2% and were among the weakest Dax performers. It's rumored that the automaker might forsake its margin goal and announce this at a capital market day in February, intending to maintain a double-digit margin.
Kion, a warehouse and intralogistics specialist, saw its shares skyrocket by 8.6% following the announcement of a cooperation with Nvidia to optimize supply chains using AI-driven robots. AI projects are currently trending among numerous companies.
Wind at the Sails for Real Estate Stocks
Jefferies upgraded real estate stocks, particularly LEG and Grand City Properties, both rising by 2% and 2.7% respectively.
Elmos Semiconductor sustained its recent rally, surging nearly 6%. The semiconductor manufacturer is expanding its partnership with partner Samsung Foundry. Meanwhile, Suess Microtec was a laggard among semiconductor stocks, dipping by around 10%. A sell recommendation from Swiss bank UBS impacted the stock.
Broad market conditions, encompassing economic recovery efforts post-COVID-19, geopolitical tensions, monetary policy changes by the European Central Bank, economic growth in the eurozone, profitability of medium-sized German companies, the performance of the manufacturing and services sectors, consumer confidence, and inflation rates, would have most likely influenced the German stock indices in January 2023.
- Despite Germany's stock indices surging on Tuesday, some investors are still seeking cost-effective investments in undervalued German cyclical sectors, anticipating a swift resolution to the US trade dispute.
- The tariff plan announced by the Trump administration to impose duties on goods from all countries, as reported in the Washington Post, initially fueled market sentiment, but the denial from the incoming US President largely left investor sentiments unaltered.
- The Eurozone's inflation data revealed a 2.4% year-on-year increase in December, in line with economists' predictions, while the ECB awaits a more challenging inflation trajectory at their meeting set for January 30.
- Shares of Kion, a warehouse and intralogistics specialist, surged by 8.6% after announcing a cooperation with Nvidia to optimize supply chains using AI-driven robots.
- Sectors such as real estate, semiconductors, and automobile were significantly influenced by factors including post-COVID-19 economic recovery, geopolitical tensions, monetary policy changes, economic growth in the Eurozone, profitability of medium-sized German companies, and consumer confidence, shaping the performance of German stock indices in January 2023.
