Germany equities were mixed at the close on Tuesday, as gains in the Transportation & Logistics, Industrials and Retail sectors propelled shares higher while losses in the Pharmaceuticals & Healthcare, Utilities and Software sectors led shares lower. At the close in Frankfurt, the DAX lost 0.29%, while the MDAX index added 0.05%, and the TecDAX index declined 0.72%. Declining stocks outnumbered rising ones by 471 to 236 and 68 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was up 1.91% to 21.29. While Dax index traded positive in early European market hours, German IFO business survey data which had bearish outcome for fourth consecutive release hinted at slowdown in economy reaffirming comments from ECB Draghi’s speech last week which dragged the pair back into bear’s playing field and closed in red for the day.
Asian Equities Weighed Down by Slump in Crude Oil Price Action
European markets were mixed on Tuesday, taking their cues from poor sentiment for global economic growth while investors waited for the results for the FOMC meeting that concludes later today, among other central bank forecasts that are to come from the likes of the BOE. Asian share markets played second string to bonds on Wednesday as a spectacular fall in the price of oil spurred speculation the U.S. Federal Reserve might be done with tightening after its policy meeting later in the session. Oil had stolen the show as a supply glut saw Brent and WTI futures shed almost 6% overnight. The recent slump in crude oil price which is occurring amid cool down in global trade and economic activity is sending a dis-inflationary pulse across all major markets.
This event is expected to add more pressure on the Fed to abandon its commitment to yet more hikes. While investors await fed forward guidance for 2019 rate hike plan, news that fed may pause rate hikes or decrease the number of rate hikes planed for 2019 is viewed as a clear sign of slowdown in US and global economy influencing bearish price action across major global equity markets during Wednesday’s trading session ahead of FOMC statement. As major Asian indices trade with mixed momentum while US Wall Street saw its indices close positive German stock market which is greatly influenced by cues from international market is expected to see range bound price action during today’s market hours. DAX futures trading in international market ahead of Frankfurt market opening is up by 0.57% on the day which suggests DAX will open positive and trade range bound with bullish bias during today’s market hours.
This article was originally posted on FX Empire
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