European markets yesterday saw positive price action in most of its major markets. Compared to cautious trading activity at the start of the week, performance in the equity market showed increased risk-on trading activity. Post outcome of UK Parliament update, other major events were US FOMC update and Sino-U.S. trade talks. Investors had a general idea on the outlook of both events and this helped improve risk appetite in European markets during yesterday’s market hours. However dovish cues from international market and mixed outcome in German macro data pressure German equity markets into bearish price action.
Sino-U.S. Trade Talk Outcome Has Greater Sway Over Price Action in German Equity Market
At the close of yesterday’s trading session, Frankfurt stock exchange saw mixed outcome in major indices. Out of total 778 stocks trading in the exchange, at the close of trading session, 371 stocks closed in green while 112 stocks closed unchanged for the day. Of three major indices in Frankfurt stock exchange, DAX and TECDAX closed in red down by 0.33% & 1.54% on the day while MDAX index closed with 0.65% increase in value. According to sectoral indices data obtained from the Frankfurt stock exchange, stocks from Chemicals, Industrials and Consumer & Cyclical sector saw high level of gains during yesterday’s market hours.
Fed’s decision to take a patient wait and watch approach towards rate hike plans for 2019 and comments on the possibility for reduction in interest rates helped improve investor sentiment in Wall Street giving major indices and shares a bullish boost. Cues from Wall Street and hopes for a positive outcome in Sino-U.S. trade talks helped all major Asian indices trade positive today. DAX futures trading in the international market was also up by nearly 0.60% ahead of Frankfurt market opening. A combination of improved investor sentiment with healthy risk appetite and positive cues from international equity markets are expected to help DAX open positive and establish a steady bull run erasing most of the losses incurred earlier this week.