Markets Roaring at Noon
Delivery Hero's course of action went awry.
The German bourse maintained its bullish streak on the last trading day of the pre-Christmas week. In subdued trading, the DAX gainned a robust 0.7%, hitting new record highs at around 23,500 points, by midday on Friday. The MDax, conversely, dipped 0.1%, while the Euro Stoxx 50 snagged a respectable 0.4% rise.
After breaching the 20,500-point milestone in mid-December, the DAX slid into a correction phase, with profit-booking trending at the year-end. The current volatility primarily stemmed from uncertainties surrounding the Federal Reserve's interest rate policy, economic policies under the incoming US President, and the anticipated economic recovery in China. Yet, the German benchmark index has delivered an impressive annual performance, with a staggering 19% surge[1][2][3].
Stock highlights:
- Delivery Hero shares took a hit following the Taiwan Fair Trade Commission's rejection of Foodpanda's sale within Taiwan. The Uber-intended acquisition, estimated at around $1 billion, was blocked, causing Delivery Hero's shares to plummet to their lowest point since late August, ending the day down 5%[2].
- Positive news of HelloFresh planning to purchase 75 million euros of its own shares spurred the meal kit provider's shares, catapulting them up by 1.6%, in a last-minute surge. This buyback is aimed at offsetting dilution from employee participation programs in 2025[2].
- Hornbach Holding will be seeking a replacement for CFO Karin Dohm, who is leaving the company by March 31, 2021, mainly at her own request. CEO Albrecht Hornbach will provisionally take on the role, should a smooth transition prove elusive[2].
- Covestro has been ousted from the DAX, as its free float fell below the 10% minimum required. From the MDax, dialysis specialist FMC has been promoted to the DAX, while real estate company Deutsche Wohnen, hailing from the SDax, has ascended to the MDax. LPKF is the latest entrant in the SDax[2].
This stock market fervor was fueled by optimistic sentiment stemming from the finalized US-UK trade agreement, which ignited hopes for a broader US-EU trade deal, as well as upcoming US-China trade negotiations. Moreover, the European Central Bank hinted at potential additional rate cuts, further stimulating equities[1][2][3]. Top performers on this day included Siemens Energy, Daimler Truck, Bayer, and others, with gains between 1.7% and 2.7%, while Commerzbank shot up nearly 4% following better-than-expected profit growth[1].
Finance experts suggest that the robust performance of the German bourse, such as the DAX's staggering 19% surge this year, indicates a positive outlook for businesses and investing opportunities, particularly in sectors like technology and manufacturing. The volatile market remains influenced by factors like the Federal Reserve's interest rate policy, economic recovery in China, and economic policies under the incoming US President, but the potential for growth remains apparent.
