The start of the week for the DAX was negative, and the declining US stock markets were unable to provide any support to the European stock markets to further their upward trends. As a result, the German stock index ended the day with a 1.69% loss, closing at 22,620 points. Investors are mainly concerned with the billion-dollar defense spending, which still appears uncertain. These expenditures require legislative changes, and a two-thirds majority in the Bundestag will be necessary. Could this mark the end of the rally after the federal election? Achieving this majority requires the approval of the Greens, which presents a significant challenge in convincing them to support this initiative.
Automobile stocks from Porsche and BMW withstood the downward trend on Monday, while Siemens, MTU, and SAP saw significant losses. SAP, the DAX heavyweight, plays a special role with a loss of 4.6%, as its weight has a substantial influence on the overall DAX performance.
British Stock Market Under Pressure
The British FTSE 100 also slipped further, with a 0.9% decline on Monday. In the UK, the fear of an economic downturn continues to keep investors on edge. The US president is notably reluctant to rule out a recession, which keeps the stock markets volatile, and it is expected that this uncertainty could lead to a deeper correction or even a bear market. The fear is palpable across European stock markets. Entain and Rolls-Royce were the biggest losers in the UK index. The British pound also had to take a break on Monday, pausing its attack on the 1.30 US dollar mark. After several days of intense upward momentum, this is not a major surprise given the underlying fundamentals. The upward trend remains intact. Investors and traders are particularly focused this week on the US inflation report, which will be released tomorrow, Wednesday.
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