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German business sentiment brightens slightly

After a week of record highs supported by solid Nvidia results, US stock indices were mixed to finish the week with some profit taking particularly in the tech space. European markets finished the week strong, supported by positive business sentiment out of Germany. To start the week, Asian markets were mixed while the Nikkei extended its rally after reaching a new all-time high for the first time since the 1980s last week. 

Shane Strowmatt, LGT
Temps de lecture
5 minutes
German flag
© Shutterstock

Germany’s ifo Business Climate Index came in at 85.5 points in February, an increase of 0.3 points from January’s 85.2 points. The mild gain was supported by improving satisfaction in the services sector, while manufacturing remained under pressure. Also on Friday, German gross domestic product (GDP) was confirmed to have contracted by 0.3% in the fourth quarter of 2023 when compared to the previous quarter. Declining investment put the brakes on the economy in the last quarter of the year, according to the German Federal Statistical Office. The Statistical Office also confirmed that GDP contracted by 0.1% for the full year 2023. Last week, the German government said it now expects GDP to grow by 0.2% in 2024, compared with a previous estimate of 1.3%. The slower growth projection is mostly due to slow global economic growth, a weak trade environment and high interest rates. Germany’s DAX gained 0.3% on Friday while the Euro Stoxx 50 finished Friday up 0.4%.

In New York, stock indices reached intraday record highs before losing some ground to finish Friday’s session. The Dow Jones Industrial gained 0.2% and the S&P 500 finished the session just marginally higher. The Nasdaq-100 finished the day in the red, down 0.4%, as traders took profits after strong gains in the previous session. Nvidia became the next stock to surpass a 2-trillion-dollar market capitalization on Friday before falling back below that level by the end of Friday’s trading session.

In the Asia-Pacific region, stock markets were trading mixed to start the week. In Tokyo, the Nikkei 225 continued to rally after reaching a new all-time high for the first time since the 1980s last week. It closed 0.3% higher on Friday. In South Korea, the financial regulator announced new measures intended to prop up stock markets including tax benefits. The measures failed to prove effective on Monday with the Kospi falling 0.8%. In Australia, the S&P/ASX 200 gained 0.1%. Hong Kong’s Hang Seng Index dropped 0.5%, while the Shanghai Composite lost 0.8%.

Looking beyond stock markets, oil prices fell last week due to concerns about a lack of demand as major economies around the world showed signs of economic deceleration. A stronger dollar also pushed down prices to start the week. West Texas Intermediate was trading around USD 76 while Brent was about USD 80.50 per barrel on Monday.

The economic battle surrounding the war in Ukraine escalated at the end of last week when the US imposed sanctions on more than 500 people and entities related to the ongoing fighting there. The sanctions were directed at a wide array of entities particularly in Russia’s finance, military supply and energy sectors.

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: US new residential sales.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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