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Trader at Deutsche Börse:
Fears of interest rates are weighing on the highly rated technology stocks in particular.
In the US, the Nasdaq collapses
Photo: Niklas Rügen / dpa
Fear of faster rising interest rates in the US weighed on the German stock market after its most recent soaring on Thursday. The leading index Dax had meanwhile dropped by a good 1.5 percent in early trading before it recovered somewhat. Most recently, there was a drop of 1.1 percent to 16,098 points. The day before, the stock market barometer missed an all-time high by just a few points. The MDax of medium-sized companies lost 1.07 percent to 35,251 points on Thursday. For the leading Eurozone index EuroStoxx 50 it went down by 1.13 percent.
As can be seen from the minutes of the US Federal Reserve published the previous evening, some of its members spoke out in favor of starting to reduce the central bank's total assets shortly after the first interest rate hike.
This would no longer replace expiring bonds, which should depress bond prices and increase yields accordingly.
This, in turn, would make stocks less attractive compared to fixed income securities.
In addition, it was repeatedly emphasized that both economic and inflation developments speak in favor of a faster exit from the loose monetary policy.
A faster rate hike than previously expected could be justified, it said.
Nasdaq remains under pressure
The Fed's minutes had triggered a sell-off on the Nasdaq technology exchange in particular. The strongly growth-oriented tech companies are considered to be particularly sensitive to interest rates because the higher the interest rates, the higher the financing costs. The highest-rated investments are likely to prove particularly vulnerable - not least tech stocks, wrote analyst Jeffrey Halley of the Oanda trading company. The
Dow
Jones Industrial
, which had risen to a record high of just under 37,000 points before the Fed minutes were published, closed on Wednesday 1.07 percent weaker at 36,407 points. The technology -heavy
Nasdaq 100
fell 3.12 percent to 15,771 points.
After the late price slide on the previous evening, the
Dow
Jones Industrial
initially appears to be stabilizing on Thursday.
The leading index of Wall Street was priced by the broker IG 0.2 percent higher to 36,485 points.
Meanwhile, the downward trend on the Nasdaq continues: the Nasdaq 100 selection index, which was shaped by this index, was again seen half a percent lower after two days with heavy losses.
If it falls below the 15,700 point mark, things get interesting from a technical point of view: The 100-day average line, which is popular with investors as a medium-term indicator, is currently running at 15,671 points.
Higher interest rates weigh on tech and growth stocks
For investors in growth stocks from the technology sector, the interest rate perspective remains a hot topic: "The Minutes surprised the markets because they reveal a rather aggressive monetary policy view on the part of central bankers," said DZ Bank analyst Birgit Henseler in a comment.
From the details of the previous meeting it emerged that a faster rate hike may be justified in light of economic and inflationary trends.
In addition, there were voices that the central bank should start reducing total assets shortly after the first interest rate hike.
Papers from US banks asked
Investors from the banking sector are happy to respond to this, because here higher interest rates are seen as beneficial for day-to-day business, for example with loans.
The papers of the major US banks JPMorgan, Morgan Stanley and Citigroup climbed in pre-trading between 1.3 and 1.5 percent.
The reporting season for banks will also begin next week.
JPMorgan expert Vivek Juneja expects very strong credit growth.
According to his thesis, the industry should not only benefit from rising interest rates in the new year.
For the papers of Tesla, an important yardstick for the basic mood on the Nasdaq, for example, things went further downhill by 1.4 percent before the market.
The price is gradually approaching the psychologically important $ 1,000 mark again.
Otherwise there was only a few moving news on the company side.
A pillar for the
Dow
are the 4.2 percent stronger shares in the drugstore and pharmacy chain Walgreens Boots Alliance.
Thanks to corona vaccinations and tests, this started the new financial year with surprisingly strong growth.
In the course of the quarterly figures, the company's annual forecast was raised.
Stock exchanges in Asia with significant losses
The Fed protocols have also weighed heavily on the stock exchanges in Asia.
The Japanese leading index Nikkei Index closed with a minus of 2.9 percent to 28,487 points.
The
CSI 300
with the 300 most important companies from mainland China recently fell by almost 1 percent to 4822 points.
In the Hong Kong Special Administrative Region, the
Hang Seng Index
fell by almost half a percent to 22,813 points.
In Australia, South Korea and India, too, prices fell significantly in some cases.
Bitcoin slips again - 30 percent price loss within eight weeks
The world's most famous digital currency, Bitcoin, also came under great pressure.
Most recently, the Cyberdevise was quoted on the Bitstamp trading platform around 8 percent weaker at 42,900 US dollars.
Since its high of 67,000 US dollars in early November, the cyber currency has lost more than 30 percent of its value within eight weeks.
Other cryptocurrencies such as ether were also under great pressure on Thursday.
Bitcoin hit its low last year at USD 27,734 on January 4th, and since then the price has more than doubled at times.
Since the beginning of November 2021, however, cryptocurrencies have been under increased selling pressure as investors fear stricter regulation.
Oil prices are falling
Oil prices fell on Thursday.
The generally gloomy mood on the financial markets also dragged down prices on the oil market.
A barrel (159 liters) of North Sea Brent cost $ 80.13 that morning.
That was 67 cents less than the day before.
The price of a barrel of American West Texas Intermediate dropped 63 cents to $ 77.22.
The main reason for the gloomy mood is the minutes of the latest interest rate meeting of the US Federal Reserve published the evening before.
Reference was also made to the corona crisis in China.
The government recently imposed exit bans on several occasions in large cities.
Due to the restricted mobility, investors fear a decline in the demand for crude oil in China.
In addition, despite the rapid spread of the Omikron variant of the coronavirus, the oil network Opec + decided to increase the output again.
During the week it was decided that the Saudi Arabia and Russia-dominated alliance would expand production by an additional 400,000 barrels per day in February.
With news agencies
