Germany equities were mixed at the close on Friday, as gains in the Insurance, Food & Beverages and Technology sectors propelled shares higher while losses in the Basic Resources, Industrials and Media sectors led shares lower. At the close in Frankfurt, the DAX rose 0.02%, while the MDAX index declined 0.64%, and the TecDAX index lost 0.19%. Declining stocks outnumbered rising ones by 418 to 288 and 78 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was down 1.97% to 16.93 a new 1-month low. While DAX closed on positive note, equity markets on Friday saw high level of bearish influence and key equity markets across the Europe closed in red.
News of Saudi Cutting Back on Crude Oil Supply is Saving Grace For Equity Market
Asian shares drifted lower on Monday with key indices seeing divided outcome as signs of softening demand in China rekindled anxiety about the outlook for world growth. A combination of weak factory-gate inflation data in China and low oil prices weighed on global stocks on Friday and the bearish sentiment in market continues to remain strong as trading session opened for the week today with bearish views in European market further strengthened by Brexit uncertainties and Italian budget woes. Risk asset markets have been under intense pressure of late as fears of a peak in earnings growth added to anxiety about slowing global trade and investment. Meanwhile, A spike in U.S. bond yields, driven by the Federal Reserve’s commitment to keep raising borrowing costs, has also shaken emerging markets as investors have reallocated funds from equity markets into U.S. dollar assets.
However equity markets received a saving grace in form of news that Saudi Arabia’s plans to cut crude oil production. Saudi Arabia’s energy minister said on Sunday that Riyadh plans to reduce its oil supply to world markets by 500,000 barrels per day in December, a global reduction of about 0.5%. China & Japanese equity markets trade flat with slight positive bias over news related crude supply from Saudi Arabia while Hong Kong and Singapore equity markets trade in red as risk appetite remained very low among investors in said market. European markets are expected to take cues from Asian counterparts and see relatively subdued momentum with positive bias during London market hours. DAX futures trading in international market was positive ahead of Frankfurt market opening up by more than 0.40% on the day supporting possibility for bullish opening of DAX today, but there is also chance for downside price action owing to low risk appetite among investors over concerns of global economic slow down.
This article was originally posted on FX Empire
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