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DAX Index, FTSE 100, STOXX 600: European Markets Buoyed by Sector Gains

By:
James Hyerczyk

DAX and FTSE 100 climb on leisure and energy gains, U.S. jobs data, and ECB rate cut hopes amid easing German inflation.

DAX Index, FTSE-100, STOXX 600

In this article:

Highlights

  • European stocks rally; Stoxx 600 up 0.36%
  • Investors await U.S. nonfarm payrolls report
  • Luxury, energy sectors drive European gains

European Markets Gain Amid Anticipation of U.S. Jobs Report

European markets experienced a notable uptick on Friday, with the pan-European Stoxx 600 index ascending to 470.48, a 0.36% increase. This surge was led by gains in travel and leisure stocks, which rose by 1.2%. The upbeat market mood was also evident in Germany’s DAX Index and the UK’s FTSE, which respectively climbed 0.19% and 0.23%.

Investor Focus on U.S. Nonfarm Payrolls

Global market participants are keenly awaiting the U.S. November nonfarm payrolls report, expected to play a significant role in shaping the Federal Reserve’s interest rate decisions over the forthcoming year. This report is poised to offer crucial insights into the labor market’s health and, by extension, the broader economic landscape.

European Stocks: A Closer Look

European shares have been buoyed by strong performances in luxury and energy sectors. The Stoxx 600’s 11% gain this year reflects a robust market, with Germany’s DAX jumping nearly 20%. Notably, easing inflation in Germany bolsters expectations of a peak in eurozone interest rates, influencing investor sentiment. The anticipation of European Central Bank (ECB) rate cuts next year, in response to slowing inflation, further fuels the market optimism.

Key Stock Movements

In the realm of individual stocks, luxury brands like Kering, LVMH, and Hermes witnessed significant gains, with Kering announcing an interim dividend for 2023. However, Anglo American faced a downturn after announcing substantial capital expenditure cuts, while Sainsbury rose following an upgrade from Goldman Sachs. The media firm Vivendi also drew attention, set to join the CAC40 index in mid-December.

FTSE and Oil Prices

The FTSE 100 in the UK mirrored this positive trend, driven partly by rising crude oil prices and energy stock gains. However, Anglo American’s expenditure cuts and a weak demand outlook dampened some of the optimism. The focus remains intensely on the U.S. nonfarm payrolls report, with investors cautiously optimistic based on recent positive data trends. The upcoming week promises to be eventful, with key monetary policy announcements expected from the U.S. Federal Reserve, the European Central Bank, and the Bank of England.

DAX Index Technical Analysis

Daily DAX Index

Analyzing the DAX Index, the current daily price of 16650.98 stands above both the 200-day (15712.88) and 50-day (15489.44) moving averages, indicating a strong upward trend and bullish sentiment.

The price is also higher than the minor support level of 16427.00, suggesting a solid base of buyer interest at this point. This position above the key moving averages and minor support level reinforces the bullish outlook for the DAX Index.

The overall market sentiment for the DAX Index appears bullish, considering its current positioning in relation to these technical indicators.

FTSE-100 Technical Analysis

Daily FTSE 100 Index

The FTSE 100 Index, currently at 7526.03, shows a bullish trend as it sits above both the 200-day (7573.82) and 50-day (7468.32) moving averages, indicating sustained positive momentum. It has also just surpassed the minor resistance level of 7524.87, which could now act as a new support level, suggesting further potential for an upward move.

However, the index is approaching the trend line resistance at 7617.00, a critical point that may test its upward trajectory. With the price above the main support of 7213.00 and minor support of 7401.87, there’s a strong base supporting the current bullish sentiment.

The market’s direction will likely hinge on its interaction with the approaching trend line resistance, which, if broken, could signal an acceleration in the upward trend.

Overall, the market sentiment for the FTSE 100 Index appears bullish, based on its position relative to these key technical indicators.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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