FRANKFURT (dpa-AFX) - The German stock market continued its correction phase on Wednesday. With uncertainty mounting once again over tariff threats from U.S. President Donald Trump, investors are keenly awaiting his appearance at the World Economic Forum in Davos. Trump triggered the latest setback over the weekend by threatening tariffs against eight European countries amid the dispute over Greenland. From its record high of 25,507 points last week, the DAX at one point fell by 1,000 points, nearly erasing the more than four percent gains made so far this year.
On Wednesday morning, Germany's benchmark index slipped 0.3 percent in the opening minutes of trading to around 24,623 points. Despite the decline, it remained well above its low for the week. Meanwhile, the MDAX of mid-cap stocks stabilized midweek, edging up 0.1 percent to 30,829 points, while the Eurozone's leading index, the EuroStoxx 50, was little changed. After hitting a record last week, it too has recently seen a notable correction.
Investment strategist Henry Morrison-Jones of UBS reminded investors that the crucial bond markets typically reach the peak of their reaction to announcements like Trump's new "Tariffs 2.0" plans between the fourth and sixth day. So far, the response has been fairly moderate, according to the expert. In fact, a sharper rise in interest rates could be what deters Trump from more aggressive rhetoric.
Morrison-Jones sees the automotive, chemical, and construction sectors as the most vulnerable. The auto sector index on Monday temporarily dropped to its lowest level since October. Now, BMW, VW, and Mercedes shares are little changed.
Qiagen, meanwhile, is up six percent after already jumping double digits late in Tuesday's session. The diagnostics specialist is once again the subject of takeover speculation.
Aixtron is also in strong demand following a recommendation from JPMorgan. Analyst Craig McDowell sees the chip equipment supplier on the verge of a broad upswing across all product categories./ag/jha/
