DAX Index Price Forecast – DAX to Continue Bearish Movement as Turkish Crisis Weighs Down European Market

German equities were lower at the close on Friday as losses in the Technology, Telecoms and Chemicals sectors propelled shares lower. At the close in Frankfurt, the DAX declined 1.99%, while the MDAX index fell 1.16%, and the TecDAX index declined 0.84%. Declining stocks outnumbered rising ones by 504 to 206 and 64 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was up 17.74% to 17.93 a new 1-month high. Overall the DAX index saw 2.74% decrease in value when comparing last week’s high and low prices levels. Technology, Retail & Industrial sector stocks were key players in German stock market last week and are expected to provide great influence during today’s trading session as market opens for the week.

DAX Likely To Move Towards Monthly Lows in Early European Market Hours

European market saw Turkish economy take a hit last week, however a week long decline of Turkey’s lira has greatly impacted European economy and this is clearly visible in Asian markets as European shares trading in Asian exchanges and the common currency EURO took a bearish hit on early Asian market hours. While German banks were not mentioned in ECB’s comment of exposure to Turkish crisis, banks from other key European markets Spain, Italy and France are set to see some amount of impact over their exposure to Turkish crisis and impact in these key markets will greatly reflect on German equities as German stock market is greatly impacted by any political and financial crisis in European countries since EURO is the main currency across the continent of Europe.

DAX is expected to open gap down and trade in early European hours down by at-least 0.60% as multiple factors weigh down the market such as cautious investor stance as they wait for Turkey’s economic plan action announcement and German 10-year bond yields edging lower over spike in investment towards safe haven instruments. A bearish sentiment surrounding EURO will greatly affect retail & Industrial sectors in Germany which will in-turn greatly affect the movement of German index DAX. In positive headlines regarding banking sector exposure to Turkey hit the market and boosts Turkey’s lira, markets across Europe are expected to see positive rebound, on the flip side a non-satisfactory announcement from Turkey could see DAX move further towards lower lows of August month’s price action.