German Blue-Chip Index Under Pressure from Dismal Growth Outlook

While the Xetra exchange remains closed for Easter Monday, the underlying pressures that pushed the DAX lower on Maundy Thursday persist. Off-exchange indications place Germany’s benchmark index near 23,188 points, showing little movement from its previous closing level of 23,168.

Economic Forecasts Cast a Long Shadow

The core issue for market sentiment stems from a stark revision by leading economic research institutes. Their collective growth forecast for Germany in 2026 has been slashed to a mere 0.6%. This downgrade is primarily attributed to the ongoing conflict involving Iran, which continues to exert upward pressure on energy costs. Consequently, inflation is projected to climb to 2.9% in the second quarter. Compounding these challenges is a strengthening euro against the US dollar, further eroding the competitive edge of the nation’s crucial export sector.

Investor Jitters Trigger Sector Rotation

The final active trading session before the holiday clearly revealed investor anxiety through pronounced sector rotation. Shares of utility giant E.ON advanced by 2.20%, as participants sought refuge in companies seen as beneficiaries of higher energy prices. Scout24 and Deutsche Börse followed with comparable gains.

Should investors sell immediately? Or is it worth buying DAX?

The sell-off was concentrated in cyclical stocks. MTU Aero Engines declined by 1.83%, with Airbus and Siemens Energy shedding 1.68% and 1.64%, respectively. Analysts point to rising jet fuel expenses and margin compression on large-scale projects as key drivers for the weakness. The broader market picture was decidedly negative, with 13 advancing stocks overshadowed by 25 decliners.

Technical Analysis Points to Critical Juncture

From a chart perspective, the DAX is navigating a critical technical area. The index recently fell below the 23,200-point level and is now testing its 200-day moving average. Immediate support is seen at Thursday’s intraday low of 22,678 points. To regain positive momentum, a sustained break above 23,235 points is required. The Relative Strength Index (RSI) sits near 59, indicating a neutral stance without a decisive directional bias.

As regular trading resumes on Tuesday, market attention will focus sharply on crude oil price dynamics. According to the ifo Institute’s assessment, increased government spending on infrastructure and defense remains the only significant pillar supporting growth—a narrow foundation for an index that has already retreated noticeably from its 52-week high of 24,035 points.