The German stock market fell sharply again on Wednesday after the clear recovery of the day before. Concerns about the banking sector caused the Dax to collapse by 2.95 percent in the afternoon to 14,784.08 points and thus below the round mark of 15,000 points. The MDax for medium-sized stocks recently fell by 3.45 percent to 26,822.36 points. Encouraging US producer price data failed to sustain.
After the collapse of three US banks and the fear of an expansion to the entire sector, the ailing Credit Suisse came into focus again in the middle of the week. In an interview with Bloomberg TV, the chairman of the Saudi National Bank, Ammar Abdul Wahed Al Khudairy, categorically ruled out additional support on request. The bank is a major shareholder in Credit Suisse, whose shares in Zurich fell to record lows at times.
Uncertainty ahead of the forthcoming interest rate decision by the ECB
The turbulence in the banking sector caused increased uncertainty again before the upcoming interest rate decision by the European Central Bank (ECB) on Thursday, said a broker. Analyst Konstantin Oldenburger from the trading house CMC Markets wonders how the ECB communicates its future monetary policy to a financial market "which is under a lot of stress due to the first major bank collapses in the USA since Lehman Brothers." Oldenburger nevertheless expects a further interest rate hike of 0.50 percentage points.
Meanwhile, the pressure on the US Federal Reserve continues to ease. Surprisingly, price increases at the manufacturer level in the USA weakened significantly in February, after consumer prices had recently risen less sharply. This did not calm the markets, however, and Wall Street also went downhill in view of the price losses across Europe. Due to the unrest in the banking sector, it is questionable whether the Fed will continue its fight against inflation.
On the corporate side, the high price losses at Credit Suisse also pushed other bank stocks into the red. The industry index Stoxx Europe 600 Banks lost 6.6 percent. In Germany, Deutsche Bank shares slipped by 8.2 percent, Commerzbank papers lost 8.6 percent at the end of the Dax.
Retail had to lose feathers
Many car and supplier stocks were also weak. The Volkswagen advantages went down by 3.6 percent, the group had lowered the margin target for its core brand. The BMW shares, which were previously in demand after the annual balance sheet, could not withstand the downward pull either, they recently lost one percent. Initially, the Munich carmaker was able to convince investors with a higher margin target and an improved investment ratio.
The retail sector also suffered, with the European retail sector falling by 4.4 percent. Weak numbers at fashion retailers H
The most recent positive outlier in the Dax was Eon with an increase of 1.5 percent. A trader explained that the final figures from the energy supplier were even better than hoped for based on the key figures. Above all, he praised the outlook: the targets made "a strong impression" and with the planned expansion of the investment program the group is above the expectations of some analysts.
Lanxess loses double digits
Meanwhile, Lanxess shareholders in the MDax had to cope with double-digit losses of 10.8 percent. The business figures and forecasts of the chemical company were poorly received. Stockbrokers were particularly bothered by the restrained targets for the first quarter and the development of the free flow of funds in the final quarter of 2022.
The euro fell sharply, trading at $1.0539 in the afternoon session. The banking turmoil drove investors into safe havens such as government bonds or the dollar. The ECB set the reference rate at $1.0737 (Monday: $1.0706) on Tuesday. On the bond market, the current yield fell from 2.38 percent on the previous day to 2.34 percent. The Rex pension index fell by 0.41 percent to 125.82 points. The Bund future rose sharply by 2.72 percent to 137.63 points.