Stock Slide in DAX: Political Uncertainty Weighs on German Stock Market

The Dax started the new trading week weakly and lost 0.70 percent in the first trading hours, falling to 18,428.09 points. The leading index is thereby approaching the lower end of the range from the past weeks, coming close to the previous June low of 18,365 points in the initial minutes. The MDax, which represents mid-sized values, also fell by 0.55 percent to 26,714.59 points. The EuroStoxx 50, the leading index of the Eurozone, recorded a decline of 1.1 percent, mainly due to uncertainties in France. President Emmanuel Macron's announcement to create clear political conditions through new elections in the National Assembly unsettled the markets. The recent rightward shift in the European elections has shaken the political ground in several countries. Market analyst Jochen Stanzl from CMC Markets emphasized that political uncertainty is weighing on the stock exchanges. JPMorgan expert Raphael Brun-Aguerre noted that Macron's party is weakened and it might become difficult to secure a majority in parliament. Political unrest was particularly noticeable in the German energy sector. Shares of Nordex SE, a leading manufacturer of wind turbines, lost 2.1 percent. The prices of RWE and SMA Solar also fell by 1.4 and 1.8 percent respectively. The poor performance of the Greens, who are considered supporters of the German energy transition, in the European elections reinforced the negative trend. Moreover, the shares of Porsche AG were traded ex-dividend, leading to an optical markdown following the annual general meeting last Friday. Investors had to account for the dividend payment of 2.31 euros per share in the pricing.