Germany equities were lower at the close on Friday, as losses in the Retail, Transportation & Logistics and Construction sectors propelled shares lower. At the close in Frankfurt, the DAX lost 0.36%, while the MDAX index fell 0.76%, and the TecDAX index lost 0.54%. Declining stocks outnumbered rising ones by 408 to 305 and 67 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was down 0.20% to 19.67. Friday’s bearish closing of equity market could be attributed to investor’s caution over possibility of trade tensions escalating between China & U.S. during weekend’s trade talks in side lines of G20 summit. Asian shares rallied on Monday after U.S. and Chinese leaders brokered a truce in their trade conflict which is viewed by many as a relief for the global economic outlook and a tonic for emerging markets.
Risk Appetite in Equity Market is High On Headlines of Truce Between China & U.S.A
Trade-exposed currencies led the early gains, with the Australian dollar notching a four-month peak, while the dollar slipped against the yuan. Markets are opening with a knee-jerk boost to risk appetite but many investors and analysts still maintain a relatively cautious investor stance to see how market reacts to headlines that follow Sino-U.S. trade truce during this week’s market hours. China and the United States agreed to halt additional tariffs in a deal that keep their trade war from escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching a deal within 90 days.
The main reason for lingering caution amid investors is due to deeply contentious thornier structural issues such as forced technology transfer remaining unresolved. Despite traders viewing current scenario as win-win for both parties involved, there are already very different official takes on what was achieved at the meeting. Dax Futures trading in international market was up by 1.14% on the day ahead of Frankfurt market opening. DAX index is expected to open positive supported by positive cues from Asian markets and maintain upward price action across the day on increased risk appetite surrounding equity markets and risky assets.