The anticipation was probably a premature joy.

Expectations had been good before the German stock exchanges opened.

The pre-market X-Dax signaled an increase of 0.5 percent for the German standard value index, and a significant increase was also expected for the index in the euro area.

But it didn't really turn out that way.

The initial plus of 0.4 percent was dampened and turned into an equally large minus.

Martin Hock

Editor in Business.

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Once again, the German stock market followed the premarket development of Wall Street.

In futures trading on the S&P 500 Index -500 Index, a sideways trend had emerged during the night, a sideways trend had emerged, which then continued to crumble.

After the strong increase of almost 4 percent the day before, the Dax is now taking a breather, they say - a statement that ultimately says that there is no specific reason.

Investor sentiment initially remained upbeat, with Japan's Nikkei index up 3.5 percent despite the Fukushima earthquake - not to mention Chinese bourses, which continued to benefit from the leadership's announcement, which has been in business for more than a year to support stressed stock markets.

According to the analysts at Unicredit, the market reaction on Wednesday was not particularly impressive in view of the interest rate hike by the US Federal Reserve, which is expected to rise seven times in the current year.

This suggests that investors have already priced in a fairly aggressive rate hike cycle.

On the other hand, the bank points to the Fed's emphasis on price stability.

The Fed appears to be adopting a more restrictive stance than originally expected, according to Allianz Global Investors.

In what is said to be the most difficult environment for an incipient tightening cycle since the mid-1980s, investors should act cautiously and not simply jump on falls.

On Thursday, the Bank of England will be the main focus, with the main relevance being in the foreign exchange market.

Neil Wilson, senior analyst at markets.com, frowns at the big picture at many volatile market segments.

It shows that liquidity is decreasing.

The Association of European Energy Traders has asked central banks and governments to provide emergency liquidity aid.

This is becoming scarce for many traders or has already been used up - healthy and solid energy companies could get into trouble.

With a view to the Ukraine war, Jeffrey Halley from the foreign exchange specialist Oanda is cautious.

The potential for an ugly turnaround is very high.

And if a solution is agreed and implemented, many things will not change.

No grain will be grown in large parts of Ukraine this year and Russia will continue to be an economic and political pariah.

The stagflation tendencies would therefore persist.

However, near-term exuberance similar to China's equity rally could continue.

duration of the conflict

According to Olivier de Berranger, investment strategist at LFDE, the path that markets will take over the next few days will be determined primarily by these two main factors: the Ukraine conflict and monetary policy.

For the former, it would be presumptuous to predict any course with certainty, writes the Frenchman.

A full and swift Russian victory seems increasingly unrealistic, however, with some sort of deadlock and return to macroeconomic fundamentals the most likely.

However, the longer the conflict lasts, the higher commodity prices are likely to remain, inflation to remain high and growth to slow.

This also affects monetary policy, so de Berranger advises caution in equities, especially those with high valuations, but also in government bonds, which are losing their main buyers.

In view of the rather small impetus from the interest rate decision and the imponderables of the Ukraine war, German investors mainly focused on the numerous company data on Thursday.

But here, too, they did not escape the dominating war: Thyssenkrupp fell more than 10 percent because the company announced that it could no longer say whether the steel business would be spun off as planned and suspended the forecast for the free flow of funds.

Even short-time work is not excluded.

The course of the truck supplier SAF-Holland fell by 13 percent.

The war and the associated increase in raw material and freight costs meant that profitability was significantly lower despite rising demand.

The company has suspended investments in the new plant in Russia for the time being.

Further effects of the war are difficult to foresee.

Since original equipment orders from Russia have been suspended for the time being, the group is currently expecting a drop in sales in the low single-digit percentage range.