DAX Index, FTSE 100, STOXX 600: European Markets Steady as Investors Await Fed Outcome

Highlights

• European markets cautiously optimistic, await Fed decision.
• Healthcare and retail sectors buoy Stoxx 600; energy caps FTSE 100.
• FTSE 100 mixed; GSK climbs, Aston Martin falls.

European Markets Anticipate Fed’s Move, FTSE 100 Steadies

European markets traded cautiously higher on Wednesday, as traders focused on the U.S. Federal Reserve’s upcoming interest rate decision. The Stoxx 600 index rose by 0.29%, rebounding from its worst monthly performance since September 2022. Additionally, Germany’s DAX Index is trading 0.16% higher. Meanwhile, the FTSE 100 remained subdued, up about 0.20%, balancing gains in healthcare and retail sectors against declines in energy and mining.

Stoxx 600 and DAX: Healthcare and Retail Take the Lead

The Stoxx 600’s rise was buoyed by healthcare stocks like GSK, which surged 1.8% following a second raise of its full-year profit and sales forecasts. Retail stocks also lifted the index, gaining 1.1% after U.K. based Next Plc revised its profit outlook upwards for the fourth time this year. On the flip side, Orsted’s third-quarter profit miss led to a 20.1% drop in its shares, dragging the index’s overall performance.

DAX and STOXX: Holding Steady Amid Global Influences

With the U.S. Federal Reserve largely expected to maintain interest rates, European investors appear to be sitting tight. This steady outlook is supported by recent data showing Eurozone inflation dropping to a two-year low of 2.9%, lower than the expected 3.1%. Despite these promising figures, the Eurozone economy contracted by 0.1% in the third quarter, adding a note of caution.

FTSE 100: A Mixed Bag of Performances

The FTSE 100 was relatively flat, despite notable performances from healthcare giant GSK and retailer Next Plc. GSK shares climbed 1.2% after the firm raised its full-year profit and sales forecasts for the second time this year. Conversely, the energy and mining sectors held the index back. Aston Martin’s shares plummeted over 16%, following production problems and a significant quarterly loss, adding more pressure to the FTSE 100.

Short-Term Outlook: Cautious Optimism

Overall, the European markets seem to be in a holding pattern, awaiting cues from the U.S. Federal Reserve. With stable figures in inflation and some strong sectoral performances, the short-term outlook appears cautiously optimistic. However, underperforming sectors and uncertainty in the global economic landscape could act as potential headwinds.

DAX Index Technical Analysis

The current daily price of the DAX Index at 14816.60 is below both the 50-day moving average of 15386.68 and the 200-day moving average of 15640.61, indicating bearish sentiment in both short-term and long-term perspectives.

Additionally, the price is situated between the minor support at 14660.00 and the minor resistance at 14908.01, suggesting a tight trading range.

Main support and resistance levels are at 14462.00 and 15096.75 respectively, serving as critical price points to watch.

In summary, the market for the DAX Index shows a bearish outlook, reinforced by its positioning relative to key moving averages and support and resistance levels.

FTSE 100 Technical Analysis

The current daily price of the FTSE 100 Index at 7320.00 is below both the 50-day moving average of 7507.63 and the 200-day moving average of 7627.95, which generally indicates bearish sentiment in both short-term and long-term contexts.

Furthermore, the price is below the minor resistance level of 7401.87 and above the minor support level of 7207.00, suggesting a consolidation phase within this range.

Given these indicators, the market sentiment for the FTSE 100 appears to be bearish, especially considering its position relative to key moving averages and support and resistance zones.