Major equity markets across Europe closed in red yesterday on risk averse trading activity following dovish cues in Asian markets on disappointing import and export data in China. German markets which is highly trade dependent owing to industrial nature of economy usually suffers from any major changes in allied market. With trade activity from US & China playing a great part in German trading activity, ongoing trade wars already took a heavy toll on economic growth in Germany and other major European economies. While recent positive progress in trade talks helped German equities move on bullish rally, yesterday’s disappointing import and export trade data from China and dovish cues from Wall Street pressured German equities into dovish price action.
Headlines From China Continues To Influence Market Price Action
All three major indices in Germany suffered losses yesterday with DAX, MDAX & TECDAX down by 0.29%, 0.43% & 1.55% on the day at close in European markets. Out of total 778 stocks listed in Frankfurt stock exchange 435 stocks declines during yesterday’s trading hours and any chance of recovery was further limited owing to caution in European markets ahead of Key Brexit vote scheduled in UK parliament today. Software and retail sectors stocks suffered most losses yesterday. While risk appetite is relatively limited ahead of today’s Brexit vote, major risk assets traded positive in Asian hours. The positive price action in forex and equity markets were further boosted on headlines from China which stated that government is taking steps to ensure positive progress in Chinese economic growth during first quarter in a bid to recovery from losses incurred in ongoing Sino-U.S. trade wars.
All major Asian indices closed with more than 1% increase in value which suggests significant risk appetite in market even if investors are cautious about Brexit proceedings. Markets have already priced in possible rejection in Brexit deal and so the price action is expected to remain positive on cues from Asian markets across today’s trading session. Ahead of European market hours, Dax futures trading in international market was trading up by 0.65% on the day. DAX index is expected to trade positive across today’s market hours supported by broad based risk appetite and cues from Asian market.
This article was originally posted on FX Empire
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