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DAX Index Daily Price Forecast – DAX To Trade Bearish On Cues From International Markets

Colin First

Germany equities were lower at the close on Monday, as losses in the Retail, Consumer & Cyclical and Food & Beverages sectors propelled shares lower. At the close in Frankfurt, the DAX declined 0.86%, while the MDAX index lost 1.64%, and the TecDAX index lost 0.87%. Declining stocks outnumbered rising ones by 575 to 155 and 49 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was up 2.96% to 20.89. European shares were in decline in general, weighed on Monday due to a profit warning from online fashion retailer ASOS.

Retail Stocks Were Major Dovish Driving Force during yesterday’s Market hours

This sent retail stocks into nose-dive as investors fretted that consumers were failing to deliver the traditional pre-Christmas spending boost to markets. This follows a sour mood last week with concerns over global growth when both Chinese and European data disappointed. Asian share markets slumped on Tuesday on cues from Wall Street which saw major stocks skidding to their lowest levels in more than a year on heightened concerns about a slowing global economy. Moving forward investors exercising cautious tone ahead of much awaited US fed rate decision update which will provide forward guidance for 2019 rate hike plans thereby deciding the future of US Greenback’s medium term outlook and participation potential of investors from emerging markets.

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In European market hours, the key release for the day is German IFO business climate index and current assessment data which will provide a clue on economic scenario of business activities in biggest European market. The outcome will greatly affect investor sentiment and is forecast to have a dovish outcome. A reading in line with expectations or worse than forecast will see equity markets take a sharp nosedive while better than expected outcome will provide fresh breath of bullish strength to European equity markets. DAX futures trading in international market ahead of European market opening is down by 0.48% on the day hinting at dovish opening of Frankfurt stock exchange. DAX index is expected to open in red and trade with bearish bias across the day influenced by cues from wall street and Asian counterparts.

 

This article was originally posted on FX Empire

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