European markets yesterday saw a sharp decline in major equities and indices as risk appetite took a hit following U.S. President Donald Trump’s state of union speech. Trump’s comments accusing Chinese of stealing intellectual property from the U.S. and taking away jobs and profit from America renewed fears of Sino-U.S. trade wars. Further investor concerns of an economic slowdown in Euro area over disappointing macro data from Germany which saw sharp fall in Factory orders also weighed down bulls in European market resulting in most major stocks and indices seeing steady downward price action during yesterday’s trading session.
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Out of total 778 stocks trading in Frankfurt stock exchange, 370 closed in green while 87 closed unchanged at end of trading session. As per data on the performance of sectoral indices from Frankfurt stock exchange, stocks from Technology and basic resources sector saw sharp gains while stocks from Food & Beverage and utility sector saw sharp losses. At end of the session, stocks were divided despite benchmark index DAX closing in red owing to high level of dovish investor sentiment. Top three major indices from Frankfurt exchange DAX, MDAX and TECDAX saw mixed outcome and closed for the day with -0.38%, 0.05% & 0.39% change in value as the market closed for the day.
The trading session resumed in most major markets in Asia following holiday celebrations, but price action was mixed as investor sentiment was cautious following President Trump’s speech yesterday and on dovish cues from U.S. Wall Street which saw major indices fall on worries of another possible government shutdown. The European market is expected to risk-averse trading activity today as traders await headlines on talks between E.U. officials and UK PM May over Brexit deal. DAX futures trading in the international market were down by 0.39% ahead of Frankfurt market opening. The German market is also susceptible to price action in Wall Street. Given the dovish performance of Dax futures in the international market and dovish cues from Wall Street, DAX is likely to open in red and see sharp downside move during today’s trading action.
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This article was originally posted on FX Empire
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