The DAX index rose higher on Friday as the global risks and uncertainties generally seemed to wear off during the course of the day and this helped the stock markets to recover and post a strong performance for the day. The markets had been hit hard over the last couple of weeks due to the rising tension between North Korea and the US and the attacks in Spain but with all the headlines around it subsiding, the markets were back to business as usual.
DAX In Tight Consolidation
This was in line with the consolidation and ranging that has been happening in the DAX index for the past many weeks and something that we have been highlighting in our forecasts as well. The index seems to be no longer driven by any of the domestic news, irrespective of whether it is good or bad, and it seems to be highly influenced by the factors in Eurozone and the rest of the world. This has led to a kind of stalemate in the DAX with the investors unwilling to either buy or sell in large quantities just yet.
Another factor that seems to have influenced this kind of ranging in the fact that there are elections scheduled to be held in Germany next month and though it seems to be a no-contest at this point of time with Merkel expected to win pretty easily, the market and the traders do not want to take a chance at this point of time and generally seem to be staying away from the DAX. The DAX has hence been consolidating between the 12350 and the 12000 region for the past few weeks and we expect this to continue in the short term.
Looking ahead to the rest of the day, we do not have any major news from Germany or the Eurozone for today and hence expect some slow and low trading for the rest of the day.