Fears of a severe economic downturn sent the German stock market plummeting on Tuesday. The most important stock indices came under increasing pressure as the trading progressed.
Fears of a severe economic downturn sent the German stock market plummeting on Tuesday. The most important stock indices came under increasing pressure as the trading progressed.
The leading index Dax slipped below its low from the beginning of March and fell to its lowest level since November 2020. At the end of trading, the loss was 2.91 percent at 12,401.20 points.
The MDax for medium-sized stocks fell by 3.41 percent to 24,635.00 points. The index last moved at this level in May 2020.
In the current stock market year, the loss on the Dax has now totaled almost 22 percent. Investors fear that interest rate hikes by major central banks in the fight against high inflation could trigger a recession. In addition, especially in Germany, there is a risk of a complete lack of natural gas supplies from Russia. This would both drive inflation further up and weigh heavily on the economy.
The focus on the financial markets is shifting from fears of inflation and interest rates to fears of stagnation and recession, wrote strategist Martin Lück from asset manager Blackrock. Deutsche Bank analyst Jim Reid pointed to rising gas prices and spoke of an “energy shock” that was increasingly fueling stagflation. Stagnation is defined as an economy that is no longer growing and prices are rising at the same time.
Uniper drops again
Shares in economically sensitive companies in particular came under strong pressure. The shares in the engine manufacturer MTU lost almost eight percent at the end of the Dax. Other cyclical stocks such as Daimler Truck, BASF and Heidelbergcement lost feathers. The shares of the armaments companies Rheinmetall and Hensoldt slumped in double-digit percentages. Since the beginning of the year they have still been clearly up, which is why investors reaped profits here.
Uniper shares fell by almost ten percent after the previous day’s losses. The indications of the federal government investing billions in the ailing utility are growing. The group is in trouble because of falling gas flows from Russia.
Shop Apotheke is growing strongly
Meanwhile, strong demand for non-prescription medicines was driving the online drug retailer Shop Apotheke strongly. With a gain of a good twelve percent, the shares were the undisputed leader of the SDax small-cap index. In contrast, the shares of Eckert broke
The EuroStoxx lost 2.68 percent on Tuesday. The Paris leading index Cac 40 and the London FTSE 100 each lost almost three percent.
The euro came under considerable pressure and fell to its lowest level in almost 20 years. It was last traded at $1.0254. The European Central Bank had previously set the reference rate at $1.0290 (Monday: $1.0455). The dollar had cost 0.9718 (0.9565) euros.
On the bond market, the current yield fell from 1.19 percent on the previous day to 1.14 percent. The Rex pension index rose by 0.32 percent to 134.37 points. The Bund future gained 1.31 percent to 151.40 points in the evening.
