DAX Index Daily Price Forecast – DAX To Trade Positive on Prevalent Risk Appetite in Broad Market

DAX index is set to trade positive on increased risk appetite and cues from the broad market, but upside move is likely to be capped as investors are expected to hold back from placing major bets ahead of next week’s key events.
Colin First
DAX Friday
DAX Friday

European markets yesterday saw its equities close on positive note supported by cues from international markets and increased risk appetite in the broad market. While gains were limited owing to caution ahead of European central bank’s interest rate decision update, there was still significant up move in most major indices and equities. German macro data saw a mixed outcome but failed to have any visible impact on price action. All three most-watched indices from Frankfurt stock exchange closed in Green yesterday. DAX, MDAX & TECDAX were up by 0.53%, 0.66% & 1.21% on the day. Gains from Technology, Media & Utilities sector shares gave DAX index significant support on its upside move yesterday as they were top gainers according to sectorial indices data at E.O.D.

Gains Likely To Be Limited Ahead of Next Week’s Key Events

At close in Frankfurt stock exchange yesterday, out of total 778 stocks, 433 stocks closed in Green. Risk appetite remains high in major global markets today and is supported by positive cues from Wall Street. Yesterday’s US Senate meeting saw both sides failing to achieve their goals and hence it had no impact on broad market price action. Asian markets traded on a positive note today on cues from Wall Street and hopes of positive progress in Sino-U.S trade talks scheduled to occur next week. Meanwhile, a lack of high impact news and investors caution ahead of key events set to occur next week, investors have held back from placing major bets which have resulted in subdued gains despite relatively steady upside move.

 

In European markets, while positive price action can be expected on influence from international markets, steady gains are unlikely as investor sentiment still seems hurt over dovish ECB update. Further comments from ECB President Draghi which reiterated the impact of a trade war on Euro area economic activity and a visible slowdown in Eurozone economic growth also at to bearish pressure from a fundamental perspective. This suggests that any positive price action set to occur in immediate and near future trading session is likely to be the result of news driven momentum. Dax futures trading in the international market were up by 1.15% ahead of European market hours. This combined with prevalent risk appetite in the broad market and positive cues from international markets suggests that DAX index is likely to open positive and trade in Green across the day.

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