DAX Index, FTSE 100, STOXX 600: Fed’s Dovish Stance Spurs European Rally Ahead of ECB, BOE Decisions

Highlights

• European stocks surge, Stoxx 600 at highest since Jan 2022.
• Fed’s rate cut signals boost DAX and FTSE 100 indexes.
• DAX index crosses 17,000 points amid bullish market trend.

European Markets Rally on Fed’s Rate Cut Signals

European stock markets experienced a significant surge on Thursday, driven by the U.S. Federal Reserve’s indications of potential interest rate cuts in the coming year. The Stoxx 600 index hit its highest level since January 2022, propelled by a 4.2% jump in mining stocks, while insurance stocks saw a marginal decline.

Positive Market Response Across Europe

Germany’s DAX Index and the UK’s FTSE 100 Index both posted notable gains, with the DAX surpassing the 17,000 points mark for the first time. This rally comes despite Germany’s recent economic challenges, including entering a technical recession earlier this year. The FTSE 100’s rise is partly attributed to the Fed’s dovish policy outlook, lifting investor sentiment across Europe.

Key Stocks Making Moves

Notable stock movements include AMS-Osram, which saw a significant increase after an upgrade by Jefferies, and Vivendi, which climbed 9% on news of a potential breakup into several entities. EQT also recorded double-digit gains, contributing to the overall positive trend in European markets.

Anticipation for Central Bank Decisions

Investors are now closely monitoring the upcoming monetary policy decisions from the European Central Bank (ECB) and the Bank of England (BOE). Both institutions are expected to maintain steady rates, but their decisions could further influence market dynamics.

Short-Term Forecast

The short-term outlook for European markets appears bullish, as investors react to the Fed’s dovish stance and anticipate the central bank decisions. The market’s response suggests optimism, with potential stability or further gains depending on the outcomes of the ECB and BoE meetings.

DAX Index Technical Analysis

The DAX Index, currently standing at 16912.18, shows robust bullish signals in the market. It is trading significantly above both the 200-day and 50-day moving averages, which are 15740.43 and 15626.84 respectively, indicating a strong upward momentum over the medium to long term.

The index has also surpassed the main support level of 16208.93 and minor support at 16427.00, underscoring its strength. The lack of defined minor and main resistance levels suggests potential for further upside without significant barriers.

Overall, the market sentiment for the DAX Index leans heavily towards bullish, supported by its current position relative to key moving averages and support levels.

FTSE-100 Index Technical Analysis

The FTSE-100 Index, currently at 7711.19, is exhibiting a strong bullish trend after picking up momentum following a long-term trendline breakout.

It’s trading above both the 200-day moving average of 7567.67 and the 50-day moving average of 7478.94, signaling a positive medium to long-term momentum.

The index has surpassed the minor support level at 7687.48 and is approaching the minor resistance at 7804.79. This position above the main support level of 7524.87 further reinforces the bullish outlook. The absence of immediate resistance levels nearby suggests room for potential upward movement.

Overall, the market sentiment for the FTSE-100 Index is bullish, supported by its current standing above key moving averages and support levels, with an eye on approaching resistance thresholds.