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DAX opening price under the microscope: Stoxx changes calculation method
New index calculation from Stoxx influences the DAX. Find out how the adjustments affect the German leading index. #DAX #Stoxx #Index calculation #Finance
DAX opening price under the microscope: Stoxx changes calculation method
Deutsche Börse subsidiary Stoxx recently adjusted the calculation method for the DAX and other DAX indices, particularly with regard to the opening and closing prices. Since March 18, 2024, there have been changes in the opening and closing prices of the DAX and other indices in the DAX family. The adjustment significantly affects the opening price of the DAX, as this is now determined based on the previous day's closing price until the initial price for all 40 DAX shares is determined.
As a result of the innovation, the DAX starts the day virtually unchanged, which can potentially cause confusion for investors if pre-market indications point to deviations. As soon as all prices are taken into account for the calculation of the DAX, the index approaches the pre-market movements again. In addition, an official starting price will continue to be determined using the old calculation method, but will only be published at 10:30 a.m.
The calculation of the DAX closing price was also adjusted by Stoxx, which means that the official closing price is only published at 6 p.m. This time gap can cause confusion for market participants as they need to adjust their trading activities. The adjustments were made to align the DAX calculation with international standards and to avoid possible delays if not all DAX companies have initial prices on time.
In addition, Stoxx has raised the cap limit for DAX stocks from ten to 15 percent, making heavyweights in the DAX even more important. These changes affect the structure and calculation of the most important German stock indices and have an impact on market participants, brokers and issuers who have to adapt to the new index calculations.