Dusseldorf. After the friendly start to the week, the Dax is missing follow-up buyers on Tuesday. The German leading index was barely changed at 25,385 points in the morning. On Monday it closed 0.9 percent higher at 25,411 points.
The Dax continues to move in the sideways range in which it has remained for several weeks. If it rises above 25,500 points, investors take profits. If it goes down to 25,000 points, a number of new buyers appear on the scene, driving the prices up again. The clear, overarching trend is missing these days.
Important company and economic data provide new orientation. The balance sheet season has begun. It was Porsche and Beiersdorf's turn on Tuesday. In the next few days, many other DAX companies will present new figures for the third quarter.
However, concerns about persistently high energy prices and their consequences for inflation and the economy continue to cause problems for the DAX. Andreas Lipkow, chief market analyst at CMC Markets, says the situation is particularly explosive in the run-up to the upcoming central bank meetings of the US Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of Japan.
The persistently high energy costs increase the risk of a renewed surge in inflation and could force the monetary authorities to adopt a more restrictive monetary policy. What the stock markets could least use at the moment are additional interest rate increases, says Lipkow.
Central bank decisions and fresh economic data could also steer the DAX more in one direction or the other. The Fed and the ECB will decide on interest rates on Wednesday and Thursday. Market participants do not expect interest rate increases from either central bank, but the words of the monetary authorities are being followed very closely on the markets.
Ahead of the upcoming interest rate decision, the ECB is publishing the results of its quarterly bank credit survey. The banks in the euro area further tightened their standards for granting loans to companies in the summer quarter. Increased risk perception and a lower risk tolerance remained the key factors, as the ECB announced. Some banks also reported increased pressure due to geopolitical uncertainties.
For the fourth quarter, financial institutions expect a further tightening of lending standards for companies as well as a significant tightening of both home loans and consumer loans.
After an initial decline, the oil price rose slightly again in the morning. The North Sea Brent variety, due for delivery in December, rose in price by 0.6 percent to $116.50 per barrel (159 liters).
Saudi Arabia, Turkey and Pakistan held talks with Iranian representatives in Tehran on Monday to ease tensions in the Middle East. The four countries agreed to continue talks, Iranian state media reported. However, the situation remains fragile given new attacks by Iran-backed Houthi rebels on key oil producer Saudi Arabia.
The consumer goods group Beiersdorf slowed the downward trend of its core brand Nivea somewhat in the third quarter. From July to September, the Hamburg-based company recorded a 1.3 percent decline in organic sales to 2.4 billion euros, as they announced on Tuesday. Business with Nivea shrank by 4.9 percent. The share loses almost one percent.
Lipkow says: “The Beiersdorf figures show how strongly consumer restraint is now affecting companies.” Brand manufacturers in particular could find it increasingly difficult to pass on higher costs to their customers without risking sales losses.
Porsche has recovered somewhat from last year's profit slump. From January to September, sales fell by almost six percent to 25.28 billion euros. The operating result, however, amounted to 1.74 billion euros, compared to just 40 million euros a year ago, as Porsche announced. The share gains around three percent. “The friendly market reaction shows that investors are quite prepared to reward convincing company figures,” said Lipkow.
Infineon: The German semiconductor manufacturer Infineon is expanding its production for data centers. For this purpose, the plant in Villach, Austria, will be modernized in the coming years for a total of 1.1 billion euros, the chip company announced on Tuesday. The world's first facility for the mass production of gallium nitride semiconductors (GaN) based on wafers with a diameter of 300 millimeters will be built there. The shares are up about one percent.
Novartis: The Swiss pharmaceutical company has raised its earnings forecast for the current year following increases in daily business. Thanks to strong drug sales, adjusted operating profit rose 11 percent to $6.04 billion from July to September. The papers are up around 1.5 percent.
HSBC: A positive interest rate environment and lower loan defaults are helping HSBC to increase profits. However, weak asset management overshadowed the bank's quarterly results presented on Tuesday. Shares listed in London then fell 6.7 percent, even though the institute announced a share buyback worth $1 billion.
