Dax opens in the red – and defies the chip selloff

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Dax opens in the red – and defies the chip selloff.

The German blue-chip index slipped into the red this morning. According to Handelsblatt, Infineon plunged by around eight percent at the open – and yet the Dax held up remarkably well. That is precisely the story of the day.

An eight percent drop in a heavyweight like Infineon normally punches holes in the overall index. The market reacts accordingly sensitively when one of Germany's most important chipmakers gets sold off. But this morning – little happened. Handelsblatt writes:

The German blue-chip index was barely influenced by the weak trading day in Asia this morning.

What matters on a day like today

The Dax is Germany's leading stock index and bundles the 40 most-traded standard values on the Frankfurt Stock Exchange. When a heavyweight like Infineon posts double-digit losses, that is a stress test for the overall index – today it passed that test surprisingly well.

What could still turn sentiment

Sentiment is not good, but also not bad enough to really drag the German blue-chip index down with it. What could bring the turnaround, according to Handelsblatt, are the upcoming economic data – they could deliver "further positive impulses for investors."

For you that means: As long as the macro data cooperates, the Dax has a real chance of clawing back the loss. If the economic signals disappoint, on the other hand, the chip selloff is likely to spill over quickly to other tech names in the index. Then the Dax would have to show whether it is more than an index carried by just a few heavyweights.