DAX Index Daily Price Forecast – Dax Set To Resume Friday’s Decline

Lack of fundamental support, dovish macro data for three consecutive months and cues from international markets to pressure DAX into another bearish trading session.
Colin First
DAX Monday
DAX Monday

Germany and other major markets across Europe closed negative on Friday despite positive price action displayed at beginning of the day’s trading session. Post profit booking activities last Thursday, while bulls found momentum on broad based risk appetite, a lack of fundamental support owing to three consecutive months of decline in industrial production which hints at slowdown in economic growth combined with dovish central bank sentiment as revealed in their latest meeting minutes hurt investors risk appetite resulting in major equities and European indices closing in red on last trading session of the week. Stocks from Industry, retail and IT sectors suffered most declines on Friday as Germany is a trade dependent industrial nation and continues to suffer losses owing to ongoing trade war between some of world’s biggest economies who also happens to be allied markets for the country.

Disappointing Chinese Macro Data Likely To Add Bearish Pressure To DAX

All three major German indices DAX, MDAX & TecDAX suffered losses on Friday with each index down by 0.31%, 0.18% & 0.54% at close of the day’s trading session. Out of 778 equities trading in Frankfurt stock exchange 372 stocks closed in red on Friday. Asian equities markets opened positive earlier in the day but cues from Wall Street and worse than expected Chinese trade data hurt investor sentiment. The impact of dovish Chinese macro data on traders resulted in risk-off trading activity across all major Asian markets resulting in bearish equity rout despite positive opening for the day. Major indices in Chinese & Singapore markets were down by more than 0.50% on the day while US index futures trading in Asian markets were down by more than 0.70% on the day ahead of European market hours.

German equity market is highly susceptible to influence from international market owing to its industrial nature of economy which is highly dependent on trading activity with other major players in global markets. The market is especially impacted over cues from US & Chinese markets which plays a great part in Germany’s trading activities and dovish price action from both markets are expected to influence dovish price action in Frankfurt stock exchange today. DAX futures trading in international market were down by 0.68% ahead of European market hours. Frankfurt exchange is expected to see dovish opening and DAX index is likely to see high downside action with possibility to fall below 10700 mark during today’s market hours.

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