DAX Index Daily Price Forecast – DAX To Trade Rangebound on Cautious Investor Sentiment

European equities yesterday saw positive price action in all major European stock exchanges. The upside price action was supported by positive cues from the international market and increased risk appetite in European markets. As German macro data saw a positive outcome earlier this week, investors concerns of economic slowdown eased influencing healthy risk appetite among European investors. News of UK lawmakers passing an amendment giving lawmakers control over Brexit related decisions was also viewed as a welcoming change supporting yesterday’s positive price action. However, gains were capped as German GFK consumer climate data saw worse than expected outcome and Euro declined in the global market. At the end of the day, the German stock market saw mixed price action with positive price action.

Speech By ECB Members Eyed for Directional Cues

While the performance of benchmark indices may paint a positive picture price action was relatively mixed owing to investor sentiment losing risk appetite from early European market hours. All major benchmark indices in Frankfurt stock exchange closed in green at the end of the day but gains were relatively low. Out of the total 778 stocks trading in exchange,  450 stocks closed in green while 255 stocks closed in red and 71 stocks closed unchanged at EOD. As per data on the performance of sectoral indices in Frankfurt exchange, 12 out of 18 close in green with stocks from Software, Financial Services & Food & Beverage sectors saw high gains while stocks from Construction, Automobile & Utility sectors saw high loss. Asian stocks saw mixed price action today with bearish price action dominating equities from most major stock exchanges. The dovish price action was the result of investors retaining a cautious stance on concerns of recession in the US & global economic slowdown despite albeit some level of easing during the previous session.

Further, concerns of uncertainties surrounding Brexit ahead of UK parliament session owing to the current scenario which is hinting at a stalemate and disappointing German macro data are weighing investor sentiment in the European market. EURO is seeing subdued price action in the global market while DAX futures trading in the international market is up by 0.20% on the day ahead of European market hours. This suggests that the German equity market may see subdued price action today. While cues from international market may pressure DAX into opening in red, price action is likely to remain rangebound as investors await a speech from ECB members and headlines on UK parliament session for directional cues. DAX is likely to trade range bound across the day while headlines inspired momentum will influence some level of volatility in the market.

Please let us know what you think in the comments below.