ROUNDUP/Frankfurt shares close: Dax weak

FRANKFURT (dpa-AFX) – A slide in the German automotive industry and a weakening Wall Street weighed on the German stock market on Tuesday. The , which had remained listlessly at the previous day’s level until midday, ultimately lost 0.96 percent to 18,265.92 points.

The lowered annual targets of BMW (ETR:) have not only put the entire automotive sector under pressure, but have also dampened the mood in general, explained market analyst Konstantin Oldenburger from the trading house CMC Markets (LON:). “After the Dax’s record run to almost 19,000 points and the subsequent sharp slide, the air seems to have gone out of it. The 18,000 mark is threatening to get closer again.”

The previous day, the recovery had already ended near 18,500 points and thus at the 21-day average. This moving average line is a measure of the short-term trend and currently represents massive resistance for the DAX.

According to Commerzbank (ETR:), the key factors for the next few trading days are consumer prices in the USA, which are on the agenda for Wednesday, and US producer prices on Thursday. They will receive particular attention ahead of the US Federal Reserve’s key interest rate decision next week, as they could possibly influence the extent of the first interest rate cut.

Tuesday’s performance of medium-sized stock exchange companies was barely changed, with minus 0.01 percent at 25,199.00 points. Meanwhile, losses dominated Europe-wide. The leading index for the Euro region, the , fell by 0.66 percent to 4,747.20 points. The national stock exchanges in Great Britain and Switzerland also weakened. In the United States, the most well-known Wall Street index, Industrial, rose by 0.50 percent, while the technology-heavy Nasdaq stock exchanges remained slightly in positive territory.

In the DAX, the focus is primarily on the numerous automotive stocks represented there. Due to problems with supplied brakes and weak business in China, BMW had lowered its profitability target, delivery targets and expectations for free cash flow. Shortly afterwards, the supplier Continental (ETR:) announced provisions in the mid-double-digit million euro range for its brake systems. This is causing concern for the entire sector.

Although Conti and BMW were the biggest losers with losses of around eleven percent, all other German manufacturers and suppliers in the DAX family also came under pressure. Porsche AG (ETR:) and Porsche SE, Volkswagen (ETR:) and Mercedes (ETR:) lost between one and a half and almost five percent. Vitesco (ETR:) and Schaeffler (ETR:) each lost around three and a half percent.

Real estate stocks, on the other hand, were in demand. The expectations that key interest rates are dying and will soon fall on the other side of the Atlantic probably played a major role in this. In addition, a buy recommendation from the US bank Goldman Sachs (NYSE:) helped the shares of the commercial real estate specialist Aroundtown (ETR:) to a price increase of 14.3 percent in the MDax.

The euro was trading at 1.1022 US dollars in the evening. The European Central Bank set the reference rate in the afternoon at 1.1031 (Monday: 1.1043) dollars. The dollar thus cost 0.9065 (0.9055) euros.

The prices of German government bonds rose. In contrast, the yield on outstanding bonds fell from 2.22 percent the day before to 2.15 percent. The bond index rose by 0.36 percent to 127.25 points. The index gained 0.27 percent to 134.94 points.