Surprisingly high consumer prices in the United States had a notable impact on the German stock market on Tuesday. The leading DAX index lost 0.92 percent to 16,880.83 points.
Capital market strategist Jürgen Molnar of trading house Robomarkets had previously warned that inflation data could move the market significantly, as it is a decisive factor for the direction of the US Federal Reserve's monetary policy. Although Inflation weakened in January, only falling to 3.1 percent instead of the expected 2.9 percent. Hopes for quick and significant interest rate cuts took a fresh hit with this data. However, Federal Reserve central bankers had recently curbed excessively high expectations regarding uncertain inflation developments.
Only greater clarity on future macroeconomic trends should allow the Federal Reserve to cut key interest rates in the future, wrote Tobias Basse of Landesbank NordLB. In his opinion, only major problems at US regional banks could lead to a rapid reduction from the current interest rate range of 5.25 to 5.50 percent.
In this context, technology stocks, which are very sensitive to interest rates, came under particularly strong pressure. Shares of chipmaker Infineon lost five percent at the end of the Dax.
Rheinmetall reaches record despite difficult market environment
Despite the gloomy market mood, Rheinmetall shares continued their record-breaking streak and rose to the top of the DAX with a 4.6 percent price increase. CDU defense expert Roderich Kiesewetter had called in the “Süddeutsche Zeitung” for the Bundeswehr's special fund to be tripled to 300 billion euros to make it competitive. Meanwhile, a spokesman for the Union faction told the German Press Agency: “Mr Kiesewetter's proposal is not the opinion of the CDU/CSU parliamentary group.” However, Hensoldt was accepted and rose 5.7 percent, being by far the best MDax stock. Renk, a newcomer to the stock market, even gained a good 15 percent.
Siltronic shares fell four percent. Due to continued weakness in demand, the wafer maker expects a significant drop in operating profit, stagnation in sales and a doubling of depreciation. One trader spoke of a big disappointment, as no improvement is expected in 2024 and, furthermore, the dividend for 2023 has been significantly reduced.
The EuroStoxx closes with a fall of 1.20 percent to 4,689.28 points
In the SDax small cap index, Norma Group recovered slightly with an increase of 1.6 percent. The connection technology specialist's last quarter was better than expected. According to the figures presented, Thyssenkrupp Nucera extended its recovery gains from the previous day and rose 4.7 percent at the top of the index. The electrolysis specialist once again grew strongly in the first quarter of the year.
The eurozone's leading index, EuroStoxx 50, closed with a fall of 1.20 percent, to 4,689.28 points. Paris' Cac 40 index and London's FTSE 100 each lost almost one percent. In New York, the Dow Jones Industrial fell more than one percent at the close of trading in Europe
Current yield of 2.38 percent
The euro was hit by US inflation data and was last trading at $1.0717. The European Central Bank had previously set the reference exchange rate at 1.0793 (Monday: 1.0773) dollars. Therefore, the dollar costs 0.9265 (0.9282) euros.
The current yield in the bond market remained at 2.38 percent. The Rex bond index rose 0.26 percent to 125.50 points. The Bund future lost 0.32 percent to 133.16 points.