FRANKFURT (dpa-AFX) - Following a brief stabilization at the start of the week, the Dax retreated once again on Tuesday as persistent tensions in the Middle East weighed on sentiment. While the ceasefire with Iran, now in its fifth week, remains in place, U.S. President Donald Trump warned that it is currently hanging by a thread.
At the opening bell, the German benchmark index shed 1.3 percent to 24,036 points. Only last week, optimism regarding a potential agreement between the U.S. and Iran had propelled the Dax to just over 25,150 points, its highest level since the start of the conflict.
The MDax, which tracks mid-cap stocks, declined by 1.5 percent to 30,980 points on Tuesday. Meanwhile, the Eurozone's blue-chip EuroStoxx 50 index lost 1.2 percent to stand at 5,822 points.
The U.S. administration has further intensified economic pressure on Iran. 'The situation appears to be at a deadlock,' commented Thomas Altmann, portfolio manager at asset manager QC Partners. He anticipates that the Middle East hostilities will have a long-lasting impact on global equity markets and the world economy. 'Hopes are now pinned on China acting as a successful mediator between the warring parties.'
Trump is scheduled to visit China shortly. While the primary focus of the trip is expected to be the resolution of the trade dispute between the world's two largest economies, market participants are also hoping for positive momentum regarding the Iranian conflict. China remains a key supporter of Iran, as Chinese refineries are the primary buyers of Iranian crude oil./ck/men
