Dusseldorf At the start of the week, the Dax fell back below the 14,000 point mark. The Dax closed Monday down 1.1% at 13,939 points.
The course of trade was interesting: after a reasonably stable start, the Dax fell sharply to 13,778 points in the morning. But just as quickly, bargain hunters returned to action and brought the leading index back to 14,000 points.
The EuroStoxx50 and the large Stoxx600 each slipped 3%, but were also able to pare their losses afterwards. The same goes for the main Stockholm index, which has sometimes fallen by eight percent. Even there, the ghost had passed quickly.
The selloff does not appear to be driven by any specific stock, said Martin Munk, equity expert at Jyske Bank. “An investor must have taken the stock market adage ‘Sell in May and walk away’ too literally,” joked one stock trader. Another stock trader operated an automated sales cascade.
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Monday’s quotation shows that the recovery phases in the Dax do not last long. Or as Robert Halver, capital markets expert at Baader Bank puts it: “The stock market bull is on sabbatical.”
Given the economic skepticism and upcoming interest rate hikes by central banks, only a few investors are apparently willing to buy stocks out of long-term conviction. This is understandable, as data from the American company Caterpillar show. The world’s largest construction machinery maker is a valid leading economic indicator and recently announced a weaker sales development compared to the previous year.
It is therefore interesting for medium-term investors to keep watching the chart and the market patterns and trends. They have already provided good guidance over the past few weeks.
In the medium term, the following rule still applies: only with sustainable prices above 15,000 points is there a chance of a reasonably good year on the stock market. The downtrend line from the yearly high of 16,285 points on January 5 would have been broken at around 14,300 points.
The month of April on the stock market calmed the situation
Looking at the long-term trend using monthly charts shows that the situation on the German stock market calmed down in April. Last month’s range was between March highs and lows.
The whims of prices on European stock exchanges
As a result, prices above 14,603 points, last month’s high, and below 13,566 points, April’s low, would signal a release or further downward momentum.
Investor sentiment supports the market
The extremely pessimistic mood of investors, extremely pessimistic for a long time, is currently having a favorable effect on the price. In the United States, the number of bullish buyers expecting higher prices is at an all-time low. And investor sentiment in the Handelsblatt Dax-Sentiment survey has been negative for 17 weeks, the highest value since the start of the survey.
These are contraindications. The reasoning behind this is that if investors are pessimistic, the majority of them have not invested. So only a few can sell and therefore depress prices.
“The fact that investors have already positioned themselves accordingly in anticipation of falling prices is against dramatic panic selling and massive setbacks,” agrees Robert Halver. “Conversely, with sustained positive impulses, skepticism can quickly turn into a willingness to buy, which is unpredictable in the short term.”
Look at the individual values
Eagle groups: Investors are punishing the real estate group for billions in losses and a consolidated balance sheet without approval: the SDax-listed company’s share has sometimes fallen by more than 40%. At the end of the session, it was down 29% to 5.12 euros.
The stock could soon be excluded from the small cap index, at least temporarily. Since the bankruptcy of Wirecard, stricter rules apply to members of the Dax indices. You must publish audited annual results within 90 days of the end of the financial year. Although the deadline can be extended by up to four months, this deadline also expires at midnight for the Adler Group.
German Bank: US voting rights adviser Glass Lewis strongly criticizes Deutsche Bank’s director compensation system. Glass Lewis advised shareholders to vote against the compensation package at the May 19 general meeting. The stock recouped its slight losses and ended up gaining 0.4%.
Wind power values: Vestas lost nearly eight percent in Copenhagen. The wind turbine maker posted a surprisingly high quarterly operating loss of 329 million euros and warned of a negative margin of minus 5% for the full year. The only silver lining is the order book and higher prices for new orders, said analyst Per Hansen of financial services provider Nordnet. In the wake of Vestas, shares of Nordex and Siemens Gamesa fell as much as 5%.
Tepla PVA: An order from chip company STMicro to supply crystal growth systems first encouraged investors to invest in PVA TePla. Shares of the tech company then turned negative and lost 2% as trading ended.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.