Market sentiment: “War and crisis are becoming the norm”

March 18, 2026. FRANKFURT (Goldberg & Goldberg). Once again, the DAX has proven to be relatively resilient since our last sentiment survey. Furthermore, the trading range of just under 2.6 percent is quite remarkable given the events surrounding the war in Iran and the volatile movement of oil prices.

Also noteworthy is the Bank of America fund manager survey published yesterday, the first since the onset of the oil price shock. International asset managers have reduced their overweight positions in global equities, albeit to a modest extent. A net 37 percent of them still reported being overweight—a decline of just 11 percentage points compared to February. However, the cash allocation jumped significantly to 4.3 percent; this is, after all, the largest increase since March 2020.

In short: risk aversion and risk awareness regarding equities have definitely increased, especially considering that geopolitical conflicts are currently classified as the greatest extreme risk. From a regional perspective, international fund managers have primarily pulled back from Eurozone equities: only a net 21 percent of them reported being overweight there in March, down from 35 percent the previous month.

Only slight risk aversion

Meanwhile, the high level of optimism among institutional investors in Germany with a medium-term trading horizon has also declined slightly compared to the previous week. Our Deutsche Börse Sentiment Index has fallen by 8 points to a new level of +25. Broadly speaking, this is attributable to a group of investors—accounting for 4 percent of all respondents—who have reversed their positions by 180 degrees from long to short. This behavior, likely driven by a short-term focus, may be attributed to previous dip buyers who likely felt that the DAX’s 1.1 percent weekly gain was not fast enough to still believe in substantial profits.

We observe a very similar trend among retail investors, among whom optimism has also declined overall compared to the previous week. In this panel, we note a parallel decline in the Deutsche Börse Sentiment Index of 8 points to a new level of +25. In contrast to institutional investors, the bullish camp has shrunk by 6 percentage points—a slightly steeper decline—with two-thirds of those willing to switch moving to the neutral camp and the remainder to the bearish camp.

Parallels Between Retail and Professional Investors

When looking at the investors we did not survey via social media, this shift bears an even stronger resemblance to the behavior of institutional investors. The vast majority of the bulls in this group who shifted positions (6 percent of all respondents) switched directly to the bear side, effectively turning their positions 180 degrees. The sentiment index in this subgroup has, after all, fallen by eleven points to a new level of +17.

The fact that the overall index ultimately stands at the same level as that of its institutional counterparts is due to the investors we surveyed via social media. Their sentiment has actually risen against the trend compared to the previous week.

Thus, no gap in sentiment has emerged between retail and institutional investors this week either. The fact that the Deutsche Börse Sentiment Index for institutional investors, at +25, still reflects a healthy level of optimism could be explained, on the one hand, by the fact that investors seem to have grown accustomed to the volatile situation surrounding oil prices and geopolitical factors. Far more serious, however, is likely the fact that many optimists have not yet seen their entry prices for the bullish positions established several weeks ago. We now estimate these to be between 24,450 and 24,500 DAX points, so we expect significant selling pressure in this range should prices rise further.

On the downside, the demand situation at 23,200–250 DAX points has improved somewhat, as has the overall situation of the DAX. Below that level, however, the domestic stock market would look worse again. 

by Joachim Goldberg

March 18, 2026, © Goldberg & Goldberg for Deutsche Börse

The Deutsche Börse Sentiment Index ranges between -100 (total pessimism) and +100 (total optimism), with the transition from positive to negative values marking the neutral line.

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