market report
After the price spike from the previous day, investors took a relaxed stance today. However, DAX remained at high levels and closed above the 24,000-point mark.
After a strong start to the week, DAX struggled to break above the 24,000-point mark for a long time today, before buying interest emerged in the second half of the session. Germany’s main index ended at 24,088 points, higher by 0.53 percent and close to its daily high of 24,108 points. MDAX mid-cap stocks rose moderately by 0.22 percent to 29,204 points.
Thomas Altmann, analyst at asset manager QC Partners, noted that convincing and, importantly, long-term oriented buyers are needed to surpass 24,000 points on a sustainable basis. “Recently, buyers have come into the market especially when prices are down.”
The US effect is weakening
The fact that there is a growing likelihood of an end to the partial government business shutdown in the US is hardly enticing investors to move out of their reserves. The US Senate majority has passed a temporary budget. This means the longest shutdown in US history is coming to an end.
Reporting season continues
Otherwise, German markets are concerned about the progress of the reporting season in the third quarter. Among others, DAX heavyweight Munich Re opened its books today and confirmed an annual profit target of six billion euros after nine months. In addition, many companies from the second tier present quarterly figures.
BASF’s DAX Group wants to list its agricultural business in Frankfurt on the stock exchange. On Tuesday, the group also presented the division’s future management team, which is expected to be ready to enter the stock market in 2027.
The spin-off of the agricultural business is part of the strategy of CEO Kamieth, who wants the chemical giant to focus more on core businesses that are closely integrated into BASF’s production network. Agricultural chemicals are no longer included. The goal is to create an independent company specializing in agriculture. However, BASF wants to remain the majority shareholder and establish a standard corporate governance structure. BASF’s agricultural division ranks third in the global market for seeds and crop protection products, behind German rival Bayer and US group Corteva.
Last year, the entire agricultural business generated sales of almost 9.8 billion euros and an adjusted operating profit (Ebitda) of 1.9 billion. However, operating profit fell – mainly due to pressure on herbicide prices – to 19.8 (2023: 22.5) percent.
The ZEW index is cloudy
The focus is also on the German economy. Financial experts’ expectations unexpectedly worsened in November. The ZEW indicator fell 0.8 points to 38.5 points compared to the previous month, as announced by the Center for European Economic Research (ZEW). On average, economists expected the increase to be 41.0 points.
“However, this atmosphere is characterized by a decline in confidence in the government’s ability to take action in economic policy,” commented ZEW President Achim Wambach. “The investment program should provide economic stimulus, but structural problems remain.”
Wall Street is in a mixed trend
In New York, the main stock index experienced an inconsistent trend at midday local time. While the Dow Jones, the leading standard stock index, rose 0.6 percent at midday local time, gains were taken from technology shares. The Nasdaq was about 0.7 percent in the red zone. If the government shutdown ends, important economic data that will provide evidence regarding the condition of the US economy will likely be released in the near future.
“If the numbers disappoint, this could make the market more volatile again in the short term,” wrote market analyst Maximilian Wienke of eToro. As the focus is once again more on the US Federal Reserve’s interest rates, he believes they should support further easing.
Softbank sells Nvidia shares – shares fall
Nvidia shares fell more significantly by around 3.5 percent after major shareholder Softbank surprisingly sold its stake in the chipmaker. Corporate boss and billionaire conglomerate Masayoshi Son raised $5.8 billion for 32.1 million shares in October, the company announced today in Tokyo. It is said that all the shares have been sold. Son has once again become more involved with the US chip giant and AI specialist after Softbank became a large shareholder in what is now the world’s most valuable company several years ago.
In the second quarter of the business year (end of September), Softbank made a profit of 2.5 trillion yen (14.1 billion euros), thanks to a book profit from Nvidia shares and a valuation gain from its technology investment vehicle Vision Fund – much more than analysts expected.
