After the previous day's significant price losses due to the SVB insolvency, the Dax steadied again on Tuesday. Bank stocks have only suffered minor losses. VW shares, on the other hand, are plummeting.
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| DAX Index |
On the German stock exchange, tempers cooled slightly on Tuesday. The Dax climbed marginally after posting its worst daily loss since mid-December at the start of the week. Fears about a potential financial crisis, which had risen following the failure of the US regional bank SVB and other institutions, have subsided considerably.
Recently, the top German index rose 0.53 percent to 15,039 points, recouping a little portion of its 3 percent drop on Monday. The MDax gained 0.54 percent, reaching 27,378 points. Eurozone's flagship index, the EuroStoxx 50, rose 0.31 percent to 4109 points.
The banking industry remains a focus: Commerzbank and Deutsche Bank's shares are sliding again on the Dax, albeit by less than 1% apiece. Things had become considerably worse for both of them by Friday, and especially by Monday. In terms of the still-young year, the industry leader's share is over 5% in the red, while the Commerzbank paper is slightly more than 12% in the black.
VW's share certificate falls 2.8 percent as a result of the Dax tail light. According to Jefferies analyst Philipe Houchois, the details of Wolfsburg are bad for the fourth quarter of 2022. Above all, he questioned the automobile manufacturer's profit margins.
Fraport provided an update on the MDax over the previous year as well as a prognosis. The Frankfurt airport operator anticipates a recovery from the Corona crisis in 2023, following a significant increase in passenger traffic last year. Therefore, dividends should not be paid to stockholders in 2022 or 2023 due to the company's continued high amount of debt as a result of the Corona issue. The stock has dropped 3.5 percent to finish last in the mid-cap index.
Wacker -Chemie paper, on the other hand, has a plus of 3.0 percent and is one of the favorites. Notwithstanding the fact that the speciality chemicals firm forecasts considerable economic losses in 2023, it intends to pay a record dividend of 12 euros per share.
Dow Jones closes down, Nasdaq up
On Monday, New York's Wall Street had calmed down, and the technology-heavy Nasdaq 100 had even risen following a loss at the end of last week. Nonetheless, the American financial system, particularly the banking industry, was slammed by the demise of three regional banks. Yet, the reaction of the US government and the US Federal Reserve to safeguard bank consumers at the cost of shareholders and creditors "may have been the appropriate move for the moment," according to market analyst Konstantin Oldenburger of CMC Markets.
The Dow Jones industrial average slid 0.3 percent in trade to 31,819 points. The Nasdaq 100, on the other hand, rose 0.5 percent to 11,188 points. The S&P 500 index fell 0.2 percent to 3855 points.
Bank stocks on both sides of the Atlantic, on the other hand, fell when three American banks failed in five days. JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Citigroup, and Bank of America all fell between 1.8 and 7.4 percent.
Several of the smaller regional banks saw far bigger price losses. Above all, investors left in droves from the US private bank First Republic Bank: the top titles fell by more than 75%. Even the announcement of additional funding failed to reassure investors. Several regional lenders suffered losses and were briefly halted from trading. Western Alliance shares dropped over 85%, and PacWest Bank shares dropped as much as 59.5 percent before trading was momentarily suspended due to volatility.
Asian stock markets slide
On Tuesday, prices fell in all major Asian trading locations owing to fears about a deepening of the US banking crisis and its implications for Asian markets. In Tokyo, the Nikkei 225, the benchmark Japanese index, sank 2.2 percent to 27,222 points, extending the week's losses. In Japan, the weak dollar, which has weakened as a result of the US banking crisis, is placing downward pressure on the stock prices of export-oriented corporations such as Sony and Toyota.
The CSI index, which includes the 300 most important stocks on the Shanghai and Shenzhen stock exchanges, fell 0.2 percent in late trading after gaining just over 1 percent at the start of the week. In the Chinese special administrative region of Hong Kong, the Hang Seng index recently lost 1.6 percent, giving up most of Monday's gains.
Bitcoin has risen to $24,500
However, the bitcoin market has praised US authorities' attempts to mitigate the damage from SVB's collapse. Bitcoin, the most prominent cryptocurrency, increased by nearly 20% to $24,065. The recent bankruptcy of the crypto bank Silvergate allowed investors to only touch cyber currency with their fingertips.
The digital currency Bitcoin was recently priced at 24,516 US dollars, up nearly 1% from the previous day. The currency fell from more over $21,000 to roughly $16,000 in November 2022, following the failure of crypto exchange FTX. Bitcoin reached a record high of $69,000 a year ago.
Oil prices continue to fall
Oil prices extended their losses from the start of the week on Tuesday. A barrel (159 liters) of North Sea Brent for delivery in May recently cost 80.04 US dollars. It was 73 cents less than the previous day. A barrel of US grade West Texas Intermediate (WTI) for April delivery decreased 75 cents to $74.05.