European market yesterday saw positive price action in all major stock exchanges on improved risk appetite and investor sentiment. News hit the market yesterday which suggested that despite their earlier comments EU is likely to provide the UK with an extension on article 50 deadline. Avoiding a messy Brexit is positive for both the EU and UK as it helps prevent scenario which would otherwise have lead to a huge economic loss. Further, investor risk appetite also seemed to be underpinned by expectations for dovish Fed forward guidance. While the German equity market is considered highly susceptible to cues from the international market it is also considered an indicator of the overall European market.
Dovish Cues From International Market To Add Pressure on Market Bulls
German equity market yesterday saw all benchmark indices in Frankfurt stock exchange move and close on a positive note. As per the data from the Frankfurt stock exchange, the three most-watched German indices DAX, MDAX & TECDAX were up by 1.13%, 0.69% & 1.60% at end of the day’s trading session. DAX index erased early loss and managed to claim new 3-month highs during yesterday’s trading session. As per data on the performance of sectoral indices from Frankfurt exchange, 16 out of 18 sectors closed in Green. Stocks from Automobile, Food & Beverage, Basic resource & Technology sectors saw a high level of gains at the end of the trading session. Out of the total 778 stocks trading in the exchange, 502 closed in green while 59 closed unchanged at the end of the day.
Asian market today saw divided price action on dovish cues from US Wall Street and caution among global investors owing to renewed trade tensions. Further, some level of profit booking made in Asian markets ahead of US FOMC update added momentum to downside price action. News hit the market last night that US Officials believed China is walking back on trade talk related demands & pledges despite US President Donald Trump hinting at progress in talks between two nations. This caused renewed worries on the possibility of a trade deal between two nations which is the cause of increased caution in investor sentiment ahead of US FOMC update. DAX futures trading in the international market was down by more than 0.80% ahead of European market hours. Cautions investor sentiment over geopolitical issues and dovish cues from international market are expected to influence dovish action in DAX index and German equities today.
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This article was originally posted on FX Empire
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