DAX Index Daily Price Forecast – – DAX to Trade Range Bound Owing to Political Uncertainties

Germany equities were lower at the close on Friday, as losses in the Telecoms, Insurance and Technology sectors propelled shares lower. At the close in Frankfurt, the DAX declined 0.94%, while the MDAX index lost 0.79%, and the TecDAX index declined 1.72%. Declining stocks outnumbered rising ones by 516 to 183 and 74 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was down 4.29% to 21.17. Both US & European equities closed on dovish note on Friday. Adding to this EURO has been trading in red in Asian market hours. The weekend saw German Chancellor Angela merkel win election by thin margin which resulted in strained relationship with coalition agreement with the German Social Democrat Party.

Merkel’s Weak Election Results Caused Strains Between Coalition Parties

News of strained relationship between allied parties and weak election results have resulted in dovish investor sentiment in local market and put a dent on EURO’s momentum in broad market. With political weakness at home, Merkel’s ability to lead within the European Union will be increasingly limited as German voters lose confidence in the coalition government, further sending the European Union into political disarray as the European bloc currently wrangles Brexit with the United Kingdom and a spiraling budget crisis with the Italian government, as well as the continued rise of extremist far-right political grassroots campaigns that have been springing up throughout Europe. Asian shares bounced from last week’s steep declines on Monday, though sentiment remained fragile amid heightened worries about corporate earnings and a slowdown in global economic growth.

However Asian indices barely managed to hold the gains as China growth woes weighed down investor sentiment and few indices Shanghai Composite, DJ Shanghai, China A50 and Singapore’s FTSE STI turned dovish in late European market hours. DAX futures trading in international market is currently up by 0.72% on the day but traded dovish in early Asian market hours with nearly 0.29% decrease in value. DAX index could open positive today but is expected to maintain range bound performance across the day over cues from international market and subdued investor sentiment in local market owing to political uncertainties.