Stock of DAX declines 5%, querying about the performance of the index prior to the US elections.
In the financial world, the US presidential elections on Tuesday have been the dominant theme. However, on the foreign exchange market and in the bond market, little was happening. The same could be said for the German stock market, where the Euro Stoxx 50 remained unchanged at 4,885 points.
Among the few movers in the German stock market today, the DHL Group (WKN: 555200) is the laggard in the German benchmark index, the DAX (WKN: 846900). The company announced its third-quarter results on Tuesday in Bonn, but the results were not as anticipated. The DHL Group's profit fell by nearly seven percent to 751 million euros, a decline attributed to increased personnel costs, a lower volume of letters sent, and weak margins for air transport.
The letter business, in particular, disappointed experts. UBS analyst Cristian Nedelcu noted potential future deterioration in volumes, raising price uncertainty for upcoming periods. Despite strong profits from pricing and cost controls, analysts warned that DHL is likely to face declining shipment volumes due to contracting global trade.
The DHL Group's stock initially surged on the strong profit and reaffirmed guidance but lost momentum as investors weighed volume risks and economic uncertainties, causing share price volatility. If a five percent drop in DHL Group stock on the German DAX index occurred after the initial post-report rally, it would likely stem from the continued volume outlook deterioration and global economic volatility emphasized by DHL management and analysts.
Meanwhile, the Heidelberg Materials stock is currently the top performer, with a gain of 1.9 percent.
Christian Subbe, chief investment officer at HQ Trust, advises investors to adopt a more cautious stance, especially given the potential for stronger fluctuations in the coming days due to the US elections. Analyst Martin Utschneider of Finanzethos predicts a narrow trading range for the Dax on Tuesday, with the index virtually unchanged from the previous day, gaining 0.2 percent at 19,183 points.
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- In the German stock market, despite the DHL Group's initial surge in stock price following the announcement of their third-quarter results, a potential decline of 5% in their stock due to volume risks and economic uncertainties might occur, impacting the DAX (stock-market).
- Christian Subbe, the chief investment officer at HQ Trust, urges investors to adopt a more cautious approach, especially in investing on the German stock-market, given the potential for increased volatility in the days leading up to the US presidential elections.
