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Dax slides again after the sell-off of US tech stocks

Dusseldorf Another sale of US tech stocks is slowing the upward movement of the major German index. The Dax fell 2.4% to 13,500 points on Thursday afternoon, a decline of 330 points. The daily minimum is 13,479 points. At this point, all of the previous day’s earnings were gone.

Since April 1 of this year, the Nasdaq index has lost more than 20% in value, while the Dax has fallen by 6%, a smaller loss than the Dow Jones index.

According to calculations by Thomas Altmann of investment house QC Partners, the Nasdaq 100 selection index has lost almost as much since November last year as it did during the Covid 19 sell-off in 2020.

Furthermore, the end of the sell-off is not yet in sight, which usually occurs following a slump accompanied by a sharp rise in retail sales. For Jochen Stanzl of broker CMC Markets, “this development is not yet visible in the Nasdaq 100”.

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The reason why the Dax is still holding up relatively well has to do with the relatively low valuation. “Compared to the values ​​of the Nasdaq 100, the price / earnings ratio of the 40 Dax values ​​is only half,” explains Altmann.

The current mood survey conducted by the Frankfurt Stock Exchange among medium-term institutional and private investors leaves little hope for a meaningful recovery. Most of the investment professionals surveyed used the falling prices since Wednesday of last week to buy. For Joachim Goldberg, who evaluates the survey, “investors’ fear of losing a rally appears to be greater than that of a new price drop”.

These purchases are more of a burden on Dax’s further development. In the event of a price increase, stockbrokers should make profits of between 14,100 and 14,150 points at the latest. The bigger problem: Due to recent purchases, demand has dropped when prices are falling. So if the Dax is under pressure, there is significantly less support.

The situation of the technical chart

With the current price losses, the focus of the Dax 40 is again at 13,500 points. Recall: after having broken the threshold of 15,000, which held the main German index for almost the entire stock market year 2021, the area around 13,500 points was therefore in focus.

This area had been highly competitive in 2020 and 2018. Ideally, today’s price drop is a so-called “pullback”, which can often be observed. After the breakout, the price returns to the original level as a kind of confirmation, and then continues to rise again.

Already on Monday, the Dax slipped to 13,380 points. However, the 13,500-point score was not held for long because the Dax was again listed above it the next day. Should the main index fall below 13,380 points, the psychologically important area of ​​13,000 points and below the year’s low of 12,438 points should then be in focus.

For more of a technical upside reaction, the German 40 standard values ​​from a technical point of view still need at least a recapture of the 50-day line, which currently stands at 14,034 points. It would be better to snap above the downtrend established at the beginning of January from the current 14,401 points.

Bitcoin’s desolate balance sheet

The collapse of Bitcoin also continues. The price fell more than six percent to $ 26,600, the lowest level in nearly a year and a half. Compared to the close of the previous week, the cryptocurrency has lost around a third of its value. From the record record, the minus is over 60 percent.

Bitcoin continues to show extremely high correlation with the development of tech stocks. For capital market expert Altmann, “at the latest with the current crash, it is clear that Bitcoin is a risky investment and not a safe haven.”

Look at the individual values

Siemens: After about 170 years, the technology group closes its business in Russia. In the last quarter, sanctions against Russia reduced profits by 600 million euros. This brings the share of four percent down to € 111.80.

Although the share has fallen below the important price level of EUR 125 in recent weeks, a relatively favorable assessment of profits and sales puts the additional risk of losses in perspective. There is a large support zone between € 90 and € 110, where setbacks could always be absorbed.

Lloyd’s table: After a sharp rise in profits earlier this year, container shipping company Hapag-Lloyd expects port bottlenecks to ease in the second half of the year. Global supply chains are still under significant pressure, including due to recent measures to combat the pandemic in China. However, the share increased by two percent over the course of the negotiations.

In a generally weak stock market environment, the share has risen nearly 50 percent since the start of the year. Over the past three months, the performance has increased by 60%.

Varta: The Swabian battery manufacturer is feeling the effects of rising raw material prices and energy costs, as well as the consequences of the war in Ukraine. Despite the problems, Varta maintains its annual objectives: the share falls by more than 11% and is trading at 71.28 euros.

In any case, the downward trend of the stock, which was once one of the favorite stocks of private investors, cannot be overlooked. The card has lost about a third of its value since the beginning of the year. The range between 90 and 100 euros, which offered a long stop to the share certificate, is now abandoned.

In stone Real estate: After declining sales and profits earlier this year, the board of real estate developer Instone admitted to annual targets and then tumbled its stock. The stock tumbled on Thursday by up to 45 percent to € 7.90. Currently, the minus is 30 percent. The group went public in February 2018 at an issue price of EUR 21.50 per share.

CEO Kruno Crepulja withdrew his 2022 targets this Thursday and did not dare to make any new predictions. Due to the uncertainties, a reliable prospect is not possible, he explained. The manager cited the aftermath of the war in Ukraine as one of the reasons. “From today’s perspective, the effects of the Russian invasion of Ukraine will lead to continued supply bottlenecks and increased construction costs.”

This news does not leave the entire real estate sector unaffected, as supply bottlenecks and rising construction costs affect all companies. As a result, Dax Vonovia shares fell by about 5.8 percent, the newspaper Patrizia even by more than twelve percent. All real estate stocks are in red.

Here you can go to the page with the Dax course, here you can find the current highs and flops in the Dax.

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