DAX Index Price Forecast – DAX to Bearish For the Week amid Mixed Cues over Risk Averse Scenario in Global Markets

Germany equities were mixed at the close on Friday, as gains in the Software, Utilities and Insurance sectors propelled shares higher while losses in the Food & Beverages, Technology and Retail sectors led shares lower. At the close in Frankfurt, the DAX rose 0.85%, while the MDAX index climbed 0.07%, and the TecDAX index fell 0.28%. Advancing stocks outnumbered falling ones by 407 to 304 and 70 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was down 3.39% to 13.44 a new 3-month low. The weekend saw a bout of global events which has resulted in bearish and risk averse sentiment prevailing on Monday as markets open across the globe. Brexit issues and news of snap election weighed down British market, while US Wall Street closed on Friday in bearish tone.

Intensifying Trade War Rows Between China & US Boosts Risk Averse Sentiment Across All Major Global Markets

Asia shares eased in holiday-thinned trading on Monday and the safe haven yen gained as China cancelled upcoming tariff talks with the United States, while oil prices jumped after top producers including Russia ruled out boosting crude output. Bearish sentiment is prevalent across broad market as China slammed the door on any trade talks with the US as $200 billion in tariffs on Chinese goods came into effect today. China also cancelled a proposed visit to Washington by vice premier Liu He originally scheduled for this week indicating signs that China is ready to put up a tough fight. While Asian equity markets are yet to see full brunt of China’s decisions, major indices across Asian markets hours saw mixed performance indicating risk averse investor sentiment is highly prevalent as trading session begins for the week.

Chinese Premier Li Keqiang said over the weekend China will cut import and export costs for foreign firms as it looks to promote an image of being open for business. The trouble is that further escalation is still on the cards as both sides are still well apart on the key issues while Trump remains defiant saying ‘it’s time to take a stand on China’ and his threat to increase tariffs on all imports from China remains. DAX Futures trading in international market ahead of German market hours was down by 0.44% indicating bearish investor’s sentiment and likelihood of bearish opening for German equities as trading session opens for the week. Amid mixed cues with bearish influence in a risk averse market, DAX is expected to open bearish and maintain downtrend movement across the day.