European market on Friday saw all its major indices and equities on all stock exchanges close in the red. The downside price action was influenced by disappointing EU and Germany’s macro data updates. Worse than expected flash PMI updates resulted in German 10-yr government bond yields dropping below zero. This caused a high level of risk-averse trading activity and dovish investor sentiment was the major cause of dovish price action. Meanwhile, concerns of a global economic slowdown and continued escalation of Sino-U.S. trade talks also added to dovish investor sentiment. At the close of European market hours, all benchmark indices in Frankfurt stock exchange saw dovish price action without exception.
German Data Eyed For Directional Cues
All three most-watched indices from the German stock market saw more than 1% decrease in value each. At E.O.D, the three indices DAX, MDAX & TECDAX were down by 1.61%, 1.63% & 1.22% on the day. Out of the total 778 stocks trade in the exchange, 538 stocks closed in red while 71 stocks closed unchanged. As per data on the performance of sectoral indices from the exchange, 15 out of 18 sectoral indices close in the red. Stock from Utilities, Food & Beverages and Financial services sector saw gains while stocks from Basic Resources, Industrial, Pharma & healthcare, Chemicals & Automobile sector saw high loss.
US Wall Street on Friday saw all major benchmark indices and equities closed in the red. The downside action was influenced by T.Yield curve inversion between three months and ten-year government bond yield. An inversion curve is viewed as a symbol of recession and this inspired a high level of risk-averse trading activity. Concerns of economic slowdown and dovish cues from US Wall Street resulted in all major Asian equities and indices closing in red today. DAX Futures trading in the international market was down by 0.30% ahead of the Frankfurt market opening on risk-averse investor sentiment. However, investors are also on lookout for German macro data update today for directional cues. While DAX may open red a positive outcome in German data will favor recovery rally while dovish outcome will result in further sharp declines.
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This article was originally posted on FX Empire
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