Dramatic DAX Thursday: All-Time High Flirtation Followed by a Bitter Sell-Off
It was not a day for the faint of heart this past Thursday. The German leading index initially got off to a flying start, fueled by strong Siemens earnings, climbing to an intraday high of 25,239 points. This brought the DAX dangerously close to its previous all-time record. However, what looked like the final breakout above the 25,000-point mark turned out to be a painful "bull trap" by the afternoon.
Beginning with the opening bell on Wall Street, the sentiment shifted completely. A heavy sell-off shortly before the close erased gains of up to 1.5% entirely. In the end, the DAX barely managed to save itself, finishing the Xetra session with a razor-thin loss of 0.01% at 24,852.69 points.
Tech Anxiety and Rate Woes: US Markets Pull the Plug
The catalyst for the sudden drop came from overseas. While investors were still celebrating Siemens' strong quarterly figures, AI-related concerns and disillusionment in the technology sector gripped the US again. The Nasdaq 100 lost over 2%, dragging the DAX down in its wake.
Additionally, the wait for today’s US inflation data is weighing heavily on the floor. Following Wednesday's strong jobs report, fears are growing that the inflation rate will leave the Federal Reserve with little room for the hoped-for interest rate cuts. Consequently, investors preferred to play it safe toward the end of trading and took profits off the table.
Telekom Soars, Siemens Gains Melt Away
Individual stocks presented a divided picture. Deutsche Telekom secured the top spot for the day with a gain of 6.1% after analysts cheered the targets set by its US subsidiary, T-Mobile US. Siemens was unable to hold onto its early record gains of over 6% due to the general market pull and closed significantly lower, though it remained a stabilizer for the index. On the losing side, Heidelberg Materials was hit hard with a drop of nearly 9%, as was Mercedes-Benz, which came under pressure following a cautious outlook.
Technical Outlook: The 21-Day Line Must Hold
From a technical standpoint, the situation is tense again following yesterday’s reversal. The DAX briefly fell back toward its 21-day moving average. For today, Friday, it will be crucial to see whether the index finds support in the 24,800-point range or if the uncertainty surrounding the US data leads to a further slide. Maintaining a sustainable position above the 25,000 mark remains the primary goal for the bulls, but for now, it seems to have moved further out of reach.
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