However, Israeli strikes on Lebanon on Wednesday quickly cast doubt on the viability of the truce and pushed oil prices higher once again. "For the time being, investors must accept that the war will remain the dominant theme for the markets," said Andreas Lipkow, chief market analyst at CMC Markets. Investors offloaded stocks in the travel and tourism sector, which had benefited significantly from falling oil prices on Wednesday. Tui shares slumped by more than three percent, as did Lufthansa's. The carrier is also facing a flight attendants' strike scheduled for Friday. The biggest laggard on the Dax was SAP, with its shares sliding 2.3 percent.
Market participants are also awaiting data on US consumer spending and the core PCE inflation rate. Inflation figures and the future monetary policy of the central bank will set the course for the next trend in the equity market, Lipkow noted. Minutes from the Federal Reserve's latest meeting, released on Wednesday evening, revealed that a growing number of members believe a rate hike may be necessary to curb inflation.
(Report by Anika Ross, edited by Kerstin Dörr. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
