Almost 450 points lost
The rise in Swiss interest rates loses the significant cushion of the DAX
06/16/2022, 7:03 pm
Following the Fed’s decision to raise the US interest rate, national central banks in Europe are following suit. This isn’t exactly providing a recovery in the equity markets. The main German index is moving towards 13,000.
Central banks are increasingly burdening stock markets with their interest rate hikes to curb high inflation. Today, Thursday, an unexpectedly significant rise in interest rates by the Swiss National Bank (SNB) put a lot of pressure on already fragile European equity markets. The decline worsened after US equities began trading at losses after a mid-week recovery.
In Frankfurt it collapsed DAX towards the mark of 13,000 points and eventually lost 3.31 percent to 13,038.49 points (previous day: 13,485.29). The main German index is therefore at its lowest level since the beginning of March. of the MDAX of midsize stocks fell 3.77% to 26,735.77 points after reaching their lowest level since November 2020.
The SNB surprisingly raised the benchmark rate by 0.50 percentage points and justified it as a measure against inflationary pressures. According to a market participant, hardly any economist expected the Swiss National Bank to join the ranks of central banks to raise interest at this point. In addition to the SNB, the Bank of England (BoE) also raised its benchmark rate by a further 0.25 percentage points during the day to 1.25%. This was expected.
The market has focused on online fashion retailers following a bearish forecast from Asos and a disappointing interim report from Boohoo. This put the shares of the German competitor Zalando noticeably under pressure. Newspapers tumbled to the bottom of the DAX by 12.4%. The other 39 values of the index also close in red. The actions of BASF And Uniper they were also among the weakest with high price losses of 6.9 and 9.7 per cent respectively. The main reason could be the further reduction in gas deliveries to Germany by the Russian energy group Gazprom. At BASF, for example, a possible shutdown of Russian gas supplies is threatening production at the Ludwigshafen chemical site.
The main index of the Eurozone Euro Stoxx 50 it lost 2.96 percent to 3427.91 points. The Cac 40 in Paris suffered slightly less pressure, while the FTSE 100 in London fell a good 3%. In New York, the leading Dow Jones Industrial barometer fell 2.5% to close in Europe.
You can read the news about what is happening on the Frankfurt Stock Exchange on our Stock Exchange Day.
of the EUR benefited from weak US economic data and most recently cost US $ 1.0513. The ECB set the reference rate at 1.0400 (Wednesday: 1.0431) dollars. of the Dollar cost 0.9615 (0.9587) euro. Prices on the bond market plummeted. Conversely, the current yield rose to 1.72% from 1.66% the previous day. The REX bond index fell 0.27% to 130.47 points.