DAX Index Daily Price Forecast – DAX To Trade Range Bound With Bearish Bias

While cues from Wall Street and Asian markets continue to provide positive influence to European markets, local political woes contribute to mixed price action across major European equity markets. Yesterday saw no-confidence vote on two Prime ministers in Euro area – UK & Greece both of which saw respective Prime ministers Triumph indicating strong support to said parties despite ongoing economic and political issues in respective countries. Meanwhile concerns of economic growth and warning from ECB President Draghi continue to influence bearish investor sentiment as economic data hints at slowdown in growth pace despite most readings coming out in line with expectations.

Bearish Investor Sentiment Remains High in European Market

German markets are especially affected owing to ongoing trade wars and politico-economic struggles. Being an industrial and trade dependent nation, slowdown in global economy and trade wars are affecting trade and business activities in Germany resulting in dovish fundamental support to market. However positive momentum in market following expected outcome in Brexit proceedings helped trade dependent German market see positive action. All three major indices in Frankfurt stock exchange DAX, MDAX & TECDAX traded positive yesterday and closed for the day up by 0.36%, 0.63% and 0.71% on the day. Out of 778 stocks in German stock exchange 455 stocks closed in green yesterday, with gains mostly concentrated in Logistic/transportation and Construction sector stocks.

Asian markets today saw mixed outcome as Chinese and Japanese indices closed in red while Singapore and Hong Kong equities closed in green.  Following update from US when trade representative mentioned key issues remain unresolved, trade war fears spiked up and continue to hurt risk appetite in market. Dax futures trading in international market ahead of Frankfurt market opening was down by 0.57% on the day. This suggest bearish opening in German stock exchange which combined with mixed cues from international market is likely to drag the pair down significantly from one month high hit earlier this week. Overall Frankfurt exchange is likely to see subdued action with possibility for steep bearish declines.