European market yesterday saw most of its major indices and key stocks close in red following bearish cues from the Asian market and on influence from latest IMF growth forecast update. After Chinese GDP data hit the market, IMF updated its global growth forecast for the second time in last six months. The latest update saw growth forecast go down further – lowest in last three years as IMF citied slowdown in economic growth and activity in China and major European markets are likely to result in less demand resulting in slow/moderate economic activity. As political and trade war-related headlines continued to eat away at investor risk appetite in recent past, the latest update from IMF sealed the deal boosting dovish investor sentiment in the market.
German ZEW Economic Update Plays Major Role In Short Term Price Action
This move caused investors to sell risk assets and move towards safe haven options in both forex and equity markets resulting in major equities closing in red yesterday. At close in Frankfurt stock exchange, saw mixed outcome as DAX closed with 0.62% decrease in value while MDAX and TECDAX indices closed with 0.76% & 0.41% increase in value at end of trading session. While cues from international market influenced bearish price action in overall markets, Media, Finance and Technology shares saw positive price action which resulted in mixed outcome in the German stock market. Of 778 total stocks that traded in Frankfurt stock exchange 340 closed in red while 73 closed unchanged at end of the day.
Major indices and key stocks from major Asian markets trade in red during Pacific-Asian market hours as the market has yet to reel away from dovish impact on weak Chinese GDP data and IMF growth forecast update. Cautious investor sentiment and profit booking activity saw all major Asian indices go down by more than 0.50% during early market hours. Further DAX futures trading in the international market were down by 0.66% ahead of Frankfurt market opening which suggests the possibility of dovish opening in German market today. Further German and EU area ZEW economic sentiment data are scheduled to release today and a dovish reading will result in sharp fall in German Equities as the outcome would be a signal of a slowdown in German economic growth and activities. Dax index will trade in red across today’s market hours but macro data outcome will have great say in how far major assets decline by end of trading session.
This article was originally posted on FX Empire
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