DAX Index Daily Price Forecast – DAX to Continue on Bear’s Path over Increase in Risk off Market Sentiment across Key Global Markets

Germany equities were lower at the close on Monday, as losses in the Food & Beverages, Pharmaceuticals & Healthcare and Transportation & Logistics sectors propelled shares lower. At the close in Frankfurt, the DAX lost 0.26%, while the MDAX index fell 0.46%, and the TecDAX index fell 0.37%. Declining stocks outnumbered rising ones by 422 to 275 and 80 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was up 2.54% to 19.00. European equity markets saw bearish decline yesterday on all major indices as market sentiment turned dovish and investors took to moving their funds from risky assets to safe haven instruments. The dollar gained against its major peers on Tuesday, reining as the preferred safe haven currency as uncertainty over Brexit negotiations and Italy’s free spending budget spooked investors away from the euro and sterling.

Geo-political Events Inspired Bearish Investor Sentiment Resulting in Gap Dow Opening of DAX Today

Asian shares fell on Tuesday as earnings season nerves in the U.S. dented Wall Street, while a cocktail of negative drivers from Saudi Arabia’s diplomatic isolation to concerns over Italy’s budget and Brexit talks depressed sentiment. This risk-off sentiment is expected to bode well for the dollar in the coming days. Selling in the region erased gains made in the previous two sessions’ rally, which were led by China stimulus hopes, with the MSCI’s broadest index of Asia-Pacific shares outside Japan dropping 1.3%. U.S. stock futures ESc1 dropped 0.8% in early Tuesday trade. On Monday the S&P 500 lost 0.43% as investors kept a wary eye on earnings amid global growth worries. Enthusiasm over some of the upbeat results was also tempered by the growing political uncertainty around the world.

Investors expect further political uncertainty in Europe over Italy’s spending plans. Moody’s, a rating agency, downgraded the Italian credit on Friday but surprisingly kept the outlook stable. An immediate market focus is on Turkish President Tayyip Erdogan, who said he will release information about the investigation on murder of journalist Jamal Khashoggi in a speech scheduled later today. Italian budget plans are also expected to continue weigh down EURO – the common currency used in European markets which in turn is expected to drag the equity markets on bear’s path. DAX futures trading in international market ahead of London market hours were down by 1.43% which suggests that DAX could move downtrend across today’s trading session. DAX has opened gap down today and is currently trading at 11,366.68 down by 1.34% on the day over increase in risk off market sentiment and bearish cues from overseas markets.