DAX slips back after fresh record
The DAX climbed to a fresh all-time high of 26,574 points following the release of US inflation data, but some investors in Frankfurt used the move as an opportunity for more extensive profit-taking.
The selling pushed the index back towards the previous day's level. While the DAX failed to secure another record close, buying momentum remains evident across European equity markets, increasingly concentrated in technology and defence stocks.
Technology and defence stocks remain resilient
Within the DAX, familiar names such as Siemens Energy, Rheinmetall and Siemens remained in positive territory even as the broader market moved lower during the afternoon.
TKMS provided a positive read-across for Rheinmetall following its quarterly results, while Infineon, Siemens Energy and Siemens benefited from the strong technology-sector lead from the United States and Asia.
Narrow leadership raises sustainability questions
However, the fundamental issue remains that the DAX rally continues to be driven by only a relatively small number of stocks.
Even when the index reached its new all-time high, fewer than half of its 40 constituents were trading in positive territory. Trading volumes also continue to decline significantly, raising questions over the sustainability of the current rally.
Investors remain cautiously optimistic
Nevertheless, overall market sentiment remains cautiously optimistic, with investors so far largely unfazed by rising energy prices.
