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DAX Index Daily Price Forecast – DAX To Decline For Second Consecutive Trading Session Today

By:
Colin First
Updated: Feb 28, 2019, 18:40 UTC

Dovish cues from the international market and reduced risk appetite in European market on dovish cues from ECB members speech are to influence downside price action in DAX today.

DAX Thursday

European markets yesterday most of its major indices and stocks close in red at end of the trading session as a bouquet of bearish factors hit the market. While macro data outcome was better than expected in the EU yesterday, it failed to have any impact on price action in equity markets. Dovish cues from Asian markets on escalating tensions between India & Pakistan, Speech from two ECB members and UK parliament session seeing unexpected outcome lead to bearish influence in the market. ECB’s Weidmann who addressed the press mentioned that German’s economic weakness could last longer than expected despite key factors driving growth are still intact while Nowotny told Italian newspaper La Stampa that Italy’s debt was a threat to the EU.

Wall Street Cues Hurt Investor Sentiment

Also, in regards to ECB’s rate hike plans for 2019, both members commented similarly hinting that monetary policy normalization will be a gradual process as the current scenario didn’t seem to merit rate hike anytime in near future. These factors led to the German equity market suffering a sharp decline in major indices and most stocks seeing significant loss yesterday. Out of a total 778 stocks trading in the exchange, 438 stocks closed in red while 82 closed unchanged at end of trading session. As per data on the performance of sectoral indices from the Frankfurt stock exchange, 15 of 18 sectoral indices closed in red yesterday with stocks from the Consumer & Cyclic, Retail, and Technology sector suffering most declines. All three sectoral indices mentioned saw more than 1.50% decline in value at end of trading session.

At market close, the three major indices from Frankfurt Stock exchange DAX, MDAX & TECDAX were down by 0.46%, 0.52% & 0.97% on the day. Major indices and equities in Asian markets suffered dovish price action today on dovish cues from US Wall Street and comments from US Trade Representative Robert Lighthizer who stated that much work in regards to Sino-U.S. trade deal is still pending hinting that scenario is not as positive as expected from U.S. President Donald Trump’s tweets made earlier this week. DAX futures trading in the international market was down by 0.30% ahead of German market opening which hints at the possibility of dovish price action during today’s market hours. Reduced optimism surrounding Sino-U.S. trade talks and dovish cues from the international market are likely to induce downside price action in DAX during today’s trading session.

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About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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