Frankfurt's Share Market - The ECB's interest rate cut causes Dax to close back.
The DAX index hung on to gains of 0.41%, reaching 18,652.67 points at the end of the day after initially climbing more than 1%. The momentum slowed, falling short of the all-time high of 18,892 points by about 100 points. The MDax also took losses, closing up 0.23% at 27,027.80.
Carsten Brzeski, an economist from ING Bank, pointed out that Christine Lagarde offered no clear guidance during her rate decision. He cautioned, "If the eurozone's economy aligns with the ECB's projections, we'll see more interest rate cuts. However, the possibility of a delay or even a reversal is quite real," Brzeski added. Thus, this rate cut alone may not signal the beginning of a more relaxed monetary policy.
Bank stocks experienced a boost, while German real estate stocks suffered from uncertainty about future monetary policy. Vonovia fell more than 2% in the DAX, while in the MDax, TAG Immobilien, LEG, and Aroundtown suffered losses of 3.1-6.4%.
SAP shares played a major role in the DAX's growth, increasing 3.6% and nearing their March record high. Berenberg Bank analyst Nay Soe Naing explained, "SAP topped market expectations with ambitious growth targets announced at their annual customer conference."
Within the MDax, no DAX companies changed position, but TUI, Rational, and Traton saw their papers moving higher. However, this didn't seem to help TUI and Traton much: both lost more than 4.8% after several days of positive trading.
Morphosys, SMA Solar, and Sixt heard the exit from the MDax with losses. This had implications for the SDax as well. Investors were excited about the return of Douglas to the stock market in March - its shares increased by half a percentage point.
On the European stage, the EuroStoxx index held steady at a 0.7% increase for the day. More interest focused on the broader Stoxx Europe 600, achieving a new record high. The country indices in Paris and London maintained their gains, and in New York, they were close to matching yesterday's level.
The euro saw a brief spike in value following the ECB's interest rate cut. It eventually settled at 1.0882 USD at the day's end. The ECB previously set the reference rate at 1.0865 USD (Wednesday: 1.0872 USD). The dollar was valued at 0.9203 euros.
The bond market yield plunged from 2.61% the day before to 2.59%. The index Rex rose by 0.09% to 124.19 points. The Bund future closed with a loss of 0.10% at 130.53 ticks.
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- Despite the interest rate cut by the ECB, Traton, a prominent German automaker, experienced significant losses in the stock market.
- The MDAX, which includes Traton, alongside TUI and other German companies, failed to maintain its momentum, with many stocks seeing declines.
- Frankfurt's share market, specifically the DAX and MDAX, witnessed a mixed reaction to the ECB's rate cut, with some companies like SAP seeing gains and others like Traton facing losses.
- Despite the ECB's interest rate cut, leading index Frankfurt am Main saw a drop in shares for companies like Traton and TUI, indicating a less optimistic outlook for the Eurozone.
- In the context of Frankfurt's share market, the interest rate cut by the ECB had varying effects on different sectors, resulting in gains for some companies like SAP and losses for others like Traton.
- The ECB's rate cut also impacted the stock exchanges across Germany, affecting the performance of companies like Traton and Vonovia in both the DAX and MDAX.
- Analysts like Carsten Brzeski from ING Bank cautioned that further interest rate cuts in the Eurozone depend on economic alignment and could be delayed or even reversed, impacting companies like Traton and other German real estate stocks.
- Within the broader context of European stock markets, the ECB's interest rate cut had implications for companies like Traton, affecting the performance of the DAX, MDAX, EuroStoxx, and other stock exchanges across the continent.
