Dax on a Roll, Nabs Another Record as Year-End Rally Persists
The Dax continued its relentless pursuit of a new record on Wednesday, closing 0.75% higher at an impressive 16,656.44 points. The German index touched a new high of 16,727.07 points, 175 points above its previous day's peak. The unstoppable Dax surge since its October low has now pushed its gains to a remarkable 14%. The MDax of medium-sized companies also saw a midweek gain, albeit not close to its 2021 high.
The labor market in the US slows down, offering hope that interest rates may soon dip lower once more. Consequently, the Fed aims to curb inflation by creating fewer job opportunities.
While Merck KGaA suffered a 13.1% loss in shares, driven by disappointing results from two Evobrutinib trials for Multiple Sclerosis treatment, this setback did not impede the Dax's march towards a new record. Merck's pharmaceutical and specialty chemicals division reported unsatisfactory results, causing HSBC to downgrade the shares to "hold" and withdraw sales estimates for Evobrutinib from its valuation model.
Fresenius shares, too, faced challenges in the pharmaceutical and healthcare sector. Recent government energy subsidies prevented the medical group from distributing dividends for the year. The share price, despite these hurdles, remained stable, earning a 0.3% rise. However, a cyberattack on a US subsidiary of the blood purification specialist, which occurred in September, brought Fresenius Medical Care shares down by 1.4%.
Volkswagen shares climbed to the top of the Dax, recording a robust 5.4% gain, thanks to some positive news regarding Xinjiang. Inspections conducted by the Wolfsburg-based company revealed no evidence of forced labor at the controversial plant in the Chinese province.
Bayer shares, despite another unfavorable American court verdict in a glyphosate lawsuit, which went unnoticed by investors, managed to maintain an impressive 2.2% rise.
Hensoldt shares experienced a 2.1% drop, making them one of the weakest MDax stocks. The defense electronics group plans to acquire defense specialist ESG from Munich for up to €730 million. The purchase will be financed through a capital increase of up to 10% and approximately €450 million in debt.
Good business outlook propelled Tui shares by an impressive 15.3%, prompting speculation of a return to the MDax and potential financial advantages for the travel group.
The Eurozone's leading index, EuroStoxx 50, surged to its highest level since 2007 and closed the day 0.68% higher at 4483.26 points. France's Cac 40 and the British FTSE 100 saw significant gains, while the Dow Jones Industrial only inched ahead after a two-day rally.
The euro remained stable, trading just below the $1.08 US dollar mark, and the European Central Bank maintained the reference rate at 1.0778 dollars (Tuesday: 1.0817 dollars). The dollar exchanged hands for 0.9278 euros (0.9244 euros).
Interest rates lowered, vigilant investors keeping an eye on bond yields which slipped to 2.28% from 2.32% the previous day. The Rex bond index increased by 0.15% to 126.17 points, while the Bund future rose by 0.38% to 134.98 points.
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- Merck KGaA shareholders wary of drug trial setbacks, decreased sales estimates.
- Dax surge despite Merck KGaA and Fresenius setbacks; US labor market slowdown brings hope of interest rate decrease.
- Merck & Co.'s stock price at €87.40; positive financial performance offsets drug trial setbacks.
- Merck KGaA shares bought and sold on various worldwide exchanges.
- Merck KGaA's growth impacted by workforce reductions and increased drug development spending.
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