Holiday Market Shows Moderate Decline for Dax
Financial Markets: Dax Slips Slightly on Ascension Day Amid Trade Policy Developments
The German benchmark index, the Dax, experienced moderate losses on Ascension Day, closing at 23,933 points—a decline of 0.4%. Despite this dip, the Dax has seen a Notable 20% increase in value this year.
On the international front, the U.S. Court of International Trade has blocked the implementation of President Donald Trump's "tariff holiday" duties. The court deemed the president had overstepped his authority, suspending and permanently prohibiting the implementation of these tariffs. This ruling marks a temporary halt to Trump's assertive trade policies, which have previously generated instability in global financial markets.
However, the court did not address industry-specific tariffs that Trump has imposed, such as those on cars, steel, and aluminum. These tariffs have significantly burdened the German automotive industry, with the administration immediately appealing the decision. It is possible that an appellate court may reinstate the tariffs until a final decision is made.
Analysts remain cautious about the situation. Fiona Cincotta, senior analyst at City Index, noted, "If the Supreme Court indeed concludes that Trump's tariffs are illegal, that would be excellent news for the market. But given the ongoing uncertainty about whether this will actually happen, there is still a degree of caution warranted."
Meanwhile, strong financial results from AI giant Nvidia have boosted sentiment in the tech sector. Rapid revenue growth eased investor concerns, with Stephen Innes of SPI Asset Management commenting, "The AI king delivered amidst the trade war." In Germany, Infineon's shares performed well, and Aixtron's shares gained in the MDax, while Suss Microtec and Siltronic saw growth in the SDax.
European luxury conglomerates also saw strong demand for their stocks, with Salvatore Ferragamo, Moncler, Hugo Boss, and Burberry all performing well. In contrast, shares of Auto Trader fell significantly in London after the platform missed its full-year revenue estimates, causing the stock to lose over 14%. Auto1’s shares also dropped temporarily by 5% in Germany.
Oil prices for Brent and WTI each rose by 1.1% to $65.61 and $62.54 per barrel, respectively. Meanwhile, nickel and zinc increased by up to 2.3%, while the price of gold fell by 0.3% to $3,280 per troy ounce.
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While not directly mentioned in the article, it's worth noting that the suspension of the higher 34% tariff to a milder 10% tariff implies partial relief but not a complete removal of tariffs affecting the German automotive industry. The ongoing tariff implementation delays suggest that negotiations are still ongoing and trade tensions remain between the U.S. and EU regarding automotive exports, likely impacting pricing and competitiveness for German automakers in the U.S. market.
- The ruling by the U.S. Court of International Trade, though temporarily halting Trump's assertive trade policies, has left the German automotive industry still bearing the brunt of industry-specific tariffs.
- In contrast to the declining stocks of Auto Trader and Auto1, European luxury conglomerates like Salvatore Ferragamo, Moncler, Hugo Boss, and Burberry experienced strong demand in the stock market.
- The strong financial results from AI giant Nvidia have instilled optimism in the technology sector, with Stephen Innes of SPI Asset Management characterizing Nvidia as the 'AI king' that delivered amidst trade war uncertainties.
