The ongoing debt dispute in the US weighed on the Dax on Tuesday. The German benchmark index lost 0.3 percent to 15,869 points in the first minutes of trading.
"The negotiations on raising the US debt ceiling are entering the next round today. But no one should expect a breakthrough," said Thomas Altmann of QC Partners. The stock markets would probably have to prepare for a long stalemate with a last-minute agreement. In the course of the day, negotiations between the leading representatives of the Republicans and the Democrats with US President Joe Biden should be resumed.
The focus is also on a number of economic data, including retail sales from the USA. Stock market participants can draw conclusions about the economy in the euro area from the gross domestic product (GDP) figures for the first quarter. In addition, the ZEW index with the economic assessments of stock market professionals will be published in the morning.
Among the biggest losers was Volkswagen, which fell 1.8 percent. According to a trader, disappointing economic data from China led to stock selling. Hornbach saw a significant decline in the SDax with a drop of more than six percent. Although the ongoing DIY boom brought Hornbach record sales in the past financial year, higher costs led to a decline in profits.
In Asia, the stock markets had developed unevenly. Gains in Japan were offset by losses in China. Markets such as India and South Korea, meanwhile, changed little.
In China, surprisingly low growth in industrial production and consumer spending weighed on the economy. According to government data, Chinese industrial production rose by 5.6 percent in April compared to the same period last year, but remained below the expectation of just under eleven percent. The increase in retail sales was also lower than economists had expected, at plus 18.4 percent.
"The much-vaunted upswing in China following the lifting of coronavirus restrictions is weaker than many economists expected," said economist Thomas Gitzel of VP Bank. "The month-on-month decline in industrial production is the second worst since the start of the time series after the Covid shock at the beginning of 2020. That's all it takes to conclude: things aren't going well in China." There is even a risk of a downward spiral. The weaker the data, the more companies are likely to adjust their planning and production capacities.
The CSI 300 index with the 300 most important stocks of the stock exchanges in Shenzhen and Shanghai lost 0.8 percent to 3967 points. The Hang Seng Index of the Hong Kong Special Administrative Region recently fell by 0.3 percent to 19,911 points.
Australian equities also weakened. The leading index S&P ASX 200 lost 0.45 percent to 7234.70 points. According to the minutes of the Reserve Bank of Australia, further interest rate hikes may be necessary. Deutsche Bank's market strategists believe an increase in August is possible. Under the current conditions, however, this should mark the peak of the increases.
Things looked better in Japan. Japan's leading index, the Nikkei 225, rose by 0.73 percent to 29,842.99 points. It extended its gains after hitting its highest level since November 2021.