DAX Struggling as Euro Regains Ground Against the Dollar

on Nov 17, 2016

The DAX finished yesterday’s session 0.66% down for the day. The day’s best performer was pharmaceuticals giant Merck, with a relatively modest 1.29% gain. Another company in the health care sector finished the day in second place as Fresenius Medical Care scored +1.26%. Software giant SAP was also up with a 1.04% uplift.

The day was dominated by Bayer, whose value was down 4.19% following the announcement of a $3 billion convertible notes issue, to be converted into equity late 2019. The move is the first major step in the fundraise for the acquisition of agrichemical and biotechnology company Monsanto. Bayer are committed to acquiring the U.S. company for around $66 billion, with the deal set for completion, pending regulatory approval from the E.U, late next year. Lufthansa was also down significantly, finishing the day over 4% in the red. The carrier is currently in a pay dispute with its pilots with a fresh round of industrial action seemingly imminent. The other big loser on the day was Heidelbergcement, with a loss of almost 4%. The cement maker had seen a spike in its share price early this month but recent losses have now brought it back to where it was 2 weeks ago.

The DAX opened down today after U.S. equities dropped back slightly on Wednesday after hitting all-time highs following last week’s presidential election result. A brief rally in early trading has since been overturned and the index is currently down 0.3% at midday. European markets are not taking kindly to the euro winning back some ground against the dollar, with the export-heavy DAX particularly impacted today.

Henkel’s share price is down 1.33% today. The consumer goods group last week posted analyst consensus-beating Q3 results but markets don’t appear to be reacting well to its 2020 strategy update which consists of focusing more on its top 10 brands, ecommerce sales and developing markets. Medium term forecasts also seem to be being considered by the market as overly optimistic.
Commerzbank is also down today with a 2.36% loss and Deutsche Bank 1.49% as the European Banking Index falls 0.7%.
Industrial gases and engineering group Linde is today’s best performer to date, up 1.26%. The company is currently in talks with TAIF Group over joint projects around the development of the petrochemicals industry in Tatarstan and Russia.

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