DAX Index Price Forecast – DAX Turns Range Bound as Pharmaceutical Stocks Pressure European marketDAX likely to remain neutral as European and Asian stock markets show subdued momentum and German macro calendar remains silent for the day.
European shares dipped on Wednesday as poor corporate earnings in the pharmaceutical sector weighed on sentiment soured by trade tensions, with Washington preparing tariffs on another $16 billion of Chinese goods. 0716 GMT, the pan-European STOXX 600 was down 0.3% with the heaviest losses in Frankfurt where the DAX GDAXI lost 0.4 percent. Germany equities were mixed at the close on Tuesday, as gains in the Transportation & Logistics, Construction and Industrial sectors propelled shares higher while losses in the Retail, Food & Beverages and Financial Services sectors led shares lower. At the close in Frankfurt, the DAX gained 0.40%, while the MDAX index lost 0.38%, and the TecDAX index declined 0.37%. Advancing stocks outnumbered falling ones by 374 to 321 and 85 ended unchanged on the Frankfurt Stock Exchange.
DAX Likely to Remain Range-Bound As Key Asian Markets Closed in Red
Asian shares extended their recovery into a fourth day on Wednesday, buoyed by strong U.S. earnings and expectations that Beijing will ramp up fiscal stimulus to cushion the impact of its worsening trade dispute with Washington. DAX 30 is trading nearly flat since trading session opened for the day and is currently at 12,686.27 up 0.30% on the day. U.S. futures are flat on Wednesday as the Sino-U.S. trade war escalated and investors waited for earnings results. There are no major economic releases scheduled for German market for rest of the week however market is expected to see some volatility post release of ECB’s economic bulletin.While Trade war between US & Europe is on mute, Trump has parked the threat of tariffs on European cars and US import tariffs of 25 per cent on steel and 10 per cent on aluminium are to remain firmly in place until further talks.
Germany being a major contributor to global automobile industry is still affected by US tariff’s as investors keep a keen eye on US tariffs over import of goods from allied countries. USD’s price action has some influence in European market and with EURO trading positive against USD, German stock market is expected to remain on neutral/positive momentum during today’s trading hours. The index is trading range bound trapped within monthly high and lows and which is confirmed by RSI & Stochastic indicators which are used to measure momentum, both show neutral signal in hourly and daily charts. The index is expected to continue range bound movement as investors remain focused on Sino-US tariff proceedings while stock markets across globe gain influence from each others momentum and Key Asian markets such as Shanghai & Tokyo exchanges closed on dovish note while famous European index EUROSTOXX50 is trading nearly flat indicative of lack of trigger to push market on bull’s path in near future.