Financial institution DAX starts off shakily, with questionable financial reports
In a surprising turn of events, several key German companies, including Telekom, BASF, Infineon, Covestro, and MTU, experienced a decline in their shares on Friday morning. This was due to weak or disappointing corporate earnings or sales results, which weighed heavily on investor sentiment.
This negative performance contrasted with the strong gains earlier in the week, driven by positive earnings reports from companies like BASF and Allianz. The decline among these major German companies contributed to a downward pressure on the European common currency, the euro.
The weaker German stock market outlook has raised concerns about the Eurozone's economic prospects, leading to a decrease in confidence in the currency. While the DAX and related stocks surged on positive earnings and export data earlier in the week, the Friday morning sell-off in these influential shares led to a softening in the euro's value.
BASF, despite confirming its preliminary figures in the morning, experienced a decline of 1.7 percent. Despite positive revenue expectations, with the company expecting revenue to increase to between 61 to 64 billion euros in 2021, up from 59.1 billion euros last year, the stock was mainly sold off. Other industrial stocks such as Infineon, Covestro, or MTU were also heavily sold on Friday morning.
The DAX started the day weakly, with an approximate calculation of 13,830 points, down 0.3 percent from the previous close. The DAX's weakness on Friday morning was not limited to Telekom and BASF but also affected other industrial stocks.
The European common currency also weakened by 0.3 percent on Friday morning. One euro was worth 0.8228 euros on Friday morning, and it weakened further to 1.2153 US dollars by the end of the morning session.
In summary, the decline in the shares of Telekom, BASF, Infineon, Covestro, and MTU was primarily due to weak earnings or sales reports, reversing the positive sentiment from earlier in the week. This decline contributed to downward pressure on the euro, reflecting concerns about the Eurozone's economic prospects linked to the performance of these key German companies. There was no single announcement or news event cited as the cause on Friday morning; rather, it appears to be a market reaction to earnings misses or lower forecasts from these specific companies.
- The sell-off in industrial stocks like Infineon, Covestro, and MTU, similar to BASF, was observed on Friday morning, contradicting the positive gains from earlier in the week.
- The decline in shares of companies such as Telekom, BASF, Infineon, Covestro, and MTU, across multiple industries including finance, has resulted in a weaker European common currency.
