Dax Index Daily Price Forecast – DAX To Trade Range Bound On Cautious Investor Sentiment

European markets yesterday opened positive but saw mixed outcome by end of trading session. While most major markets closed positive a few markets saw their stocks decline as the market lost support from a fundamental perspective. At the start of the day optimism surrounding Sino-U.S. trade talks inspired by U.S. President Donald Trump’s comments inspired a fresh wave of increased risk appetite. The positive investor sentiment in the market was further underpinned by comments from ECB members who downplayed economic slowdown and hinted at a possible rate hike discussion in summer.  However, towards the end of day news hit the market that Spain government lost its budget vote and is likely to see snap election while EURO area macro data released yesterday were disappointing as well leading to the dovish turn of events at end of trading session.

Investors Hold Back From Placing Major Bets To Avoid Volatile Price Action

However, the German equity market saw all its major indices and the majority of top stocks trade positive and close in the green. Owing to little impact of macro data updates and political proceedings on the German market, the Frankfurt stock exchange saw positive price action across yesterday’s trading session. Out of total 778 stocks trading in the exchange, 410 stocks closed in green while 72 closed unchanged at end of trading session. As per data on the performance of sectoral indices from Frankfurt stock exchange, 13 of 18 sectoral indices closed positive for the day and stocks from basic resources, technology and construction sectors were the top gainers of the day with all three indices seeing more than 1% increase in value. Further, all three major German indices also saw a sharp upside move and DAX, MDAX & TECDAX indices closed for the day with 0.37%, 0.61% & 0.43% increase in value respectively.

Pacific-Asian market hours saw major indices and stocks in major Asian economies trading mixed activity as investors took a cautious stance ahead of Sino-U.S. trade talks. Given the fact that outcome of ongoing two-day trade talk will decide whether there is going to trade deal between U.S.A & China, despite prevalent optimism displayed earlier in the week, investors choose to book profits and hold back from placing bets to avoid volatility and possible downside move. DAX futures trading in the international market were positive ahead of the Frankfurt market opening up by 0.30% on the day. However, given the performance of the EURO in the broad market, investor sentiment in European markets also display cautious edge. This suggests that DAX is likely to open positive on prevalent risk appetite, but a sharp upside move is unlikely while cues from international market are likely to inspire range-bound price action.

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This article was originally posted on FX Empire

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