The German stock market witnessed the DAX taking a breather from its record-setting spree on Thursday, failing to surpass the previous day's peak. Although the leading index started close to Wednesday’s zenith of around 18,893 points, investor confidence slightly waned as the day progressed. In the afternoon, the DAX recorded a decline of 0.38% settling at 18,798.13 points. Fresh economic data from the United States did not provide any momentum to the market.
One of the significant drag factors for the index was Siemens, with the technology group’s stock enduring a substantial drop of 5.2% following the publication of its quarterly report, which was perceived by traders as somewhat disappointing, signaling an end to the robust rally in Siemens shares.
Conversely, the MDax, which lists mid-cap companies, rose to its highest level since September 2023, gaining 0.64% to reach 27,628.15 points, thus narrowing the gap with the DAX. However, since the start of the year, the MDax has still been lagging quite discernibly behind the DAX. The EuroStoxx 50, the benchmark index for the Eurozone, displayed a slight dip of 0.4% on Thursday afternoon.
Over in the United States, major stock indices attained new record levels the previous evening after the release of inflation figures and stabled at the onset of Thursday's session. The inflation rate in the US had shown signs of a modest decline in April, reigniting expectations of an upcoming interest rate shift, despite Federal Reserve Chairman Jerome Powell sending contradictory signals just on Tuesday.
"The dream of interest rate cuts is definitively back on the trading floor, the prospect of cheaper and consequently more money is pushing stock prices higher," commented Jürgen Molnar, capital market strategist at broker RoboMarkets. However, analyst Christian Henke from the brokerage pointed out that US consumer prices are still significantly above the Fed's target of two percent, noting that for the hope of interest rate reductions in the coming months, a further decline would be desirable.
Besides Siemens, another DAX-listed company, Deutsche Telekom, reported quarterly earnings but failed to impress, with aspects such as cash flow being criticized. Deutsche Telekom shares fell by 0.5%.
Shares of the biotech supplier Sartorius faced a downturn of 5.8%, drifting towards their yearly low after a brief period of stabilization. Mid-April had seen a negative response to Sartorius’s first-quarter results.
Meanwhile, advertising firm Ströer received a ratings upgrade from "Neutral" to "Outperform" by investment bank Oddo BHF, with the price target being lifted from 60 to 100 euros. The firm's core business in outdoor advertising is expected to demonstrate robust growth in both short and medium terms. Investors responded positively, with Ströer shares climbing 5.5% in the MDax. On the other hand, Freenet saw a decline of just over four percent following its earnings report, with TV advertising expenditures posing a constraint for the mobile and TV service provider.
Several stocks traded with a dividend discount on Thursday, which could lead to optically lower stock appearances. In the DAX, this includes BMW, Daimler Truck, SAP, and Symrise.
In currency markets, the Euro was trading at 1.0862 US dollars in the afternoon. The European Central Bank (ECB) set the reference rate at 1.0832 dollars on Wednesday. Bond markets recorded a decline in yield, with the overall yield slipping from 2.54% to 2.49% from the previous day. The Rex bond index increased by 0.28% to 124.82 points, while the Bund future slightly dropped by 0.14% to 131.59 points.