- Dax is down again - Asian stock markets are down
In light of a sell-off on Asian stock markets, the Dax continues its recent downward trend. The German benchmark index fell by 2.1 percent on Monday to 17,297.98 points; at the start of trading, it had lost more than 3 percent and reached its lowest level since February. At the same time, the stock market barometer fell below the closely watched 200-day moving average, which provides insights into the long-term trend.
12 percent crash in Japan
Investors reacted primarily to the sharp decline in stock prices on Asian exchanges. In Tokyo, the Nikkei 225 plummeted by 12.4 percent to 31,458.42 points. As the Japanese benchmark index has now lost more than 20 percent from its recent record high, market observers are speaking of a bear market. This means that the Japanese stock market is characterized by bearish sentiment and falling prices. The recent significant appreciation of the Japanese yen has put considerable pressure on the stock prices of Japanese export-oriented companies.
Heavy losses also recorded at other major Asian trading places. For example, the benchmark index Kospi in Seoul plummeted by 8.8 percent, and in Taipei, the Taiex lost 8.4 percent. On a closing basis, this was the largest daily loss ever recorded.
At Asian stock exchanges, technology stocks suffered from a report that chipmaker Nvidia is delaying the launch of new AI chips due to design flaws. Nvidia had recently been the driving force behind the general stock market rally as a big beneficiary of the boom theme of artificial intelligence (AI).
Concerns about US economy
Moreover, investors were spooked by concerns about a possible hard landing of the US economy. As a result, the global economy could also weaken.
The fear of a recession in the United States particularly affects the values of the lower tiers of the stock market here. The MDax of mid-sized stocks lost 2.68 percent to 23,808.28 points, and the SDax of small-cap stocks fell by 3.1 percent. Mid-sized and small companies are particularly dependent on the economic cycle.
It went down significantly in Europe as well. The Eurozone benchmark index, the EuroStoxx 50, lost 2.3 percent. It is also expected that US technology stocks could crash. The extent to which uncertainty is spreading in New York can be seen in a look at the fear gauge VIX. This measures the volatility of stock markets and reached a high on Monday not seen since mid-2020.
Almost all losers in the Dax
In the Dax, there were almost only losers. Only Infineon shares gained and rose by almost one percent. The chipmaker slightly improved in the third quarter and stopped its downward trend of the previous quarters. At the index's end, Zalando shares fell by 5.6 percent.
United Internet shares suffered a drop of more than 15 percent at the end of the MDax. The internet and telecommunications conglomerate had slightly lowered its expectations for the full year after the temporary outage of the mobile network of its subsidiary 1&1. Its shares plummeted as the bottom performer in the SDax by 15 percent.
Cryptocurrencies under pressure
That investors are avoiding risky assets at the start of the week on both sides of the Atlantic is also evident in a look at cryptocurrencies, which are considered highly speculative. The price of the oldest and best-known cryptocurrency, Bitcoin, continued to lose ground on the Bitstamp trading platform, falling to as low as $49,650 and reaching its lowest level since February. Alongside Bitcoin, other cryptocurrencies were also under strong selling pressure.
Following the sell-off on Asian stock markets, concerns about a potential hard landing of the US economy have also impacted the performance of the Dax. The German benchmark index fell significantly, with almost all Dax companies experiencing losses. Additionally, the uncertainty in the US market is causing increased volatility in the value of cryptocurrencies, as the price of Bitcoin continued to decrease on the Bitstamp trading platform.
