European market yesterday saw equities and major indices trade and close on positive note across key European stock exchanges. Positive cues from the international market, risk on investor sentiment supported by optimism surrounding Sino-U.S. trade talks helped underpin market bulls across the day. While Brexit woes initially pressure European equities, headlines which stated DUP would abstain from voting on Customs union 2.0 helped improve hopes surrounding Brexit progress which also added to positive investor sentiment in European markets. However, disappointing EU macro data outcome influenced some level of bearish pressure in the market capping intra-day gains. German market saw positive price action across the day despite dovish macro data updates.
ECB Praet’s Speech Eyed For Directional Cues
Bulls dominated equities and futures in the Frankfurt stock exchange as evident from the performance of benchmark indices. All six benchmark indices from the exchange closed on positive note. The three most-watched indices DAX, MDAX and TECDAX were up by 1.34%, 1.39% & 1.65% on the day. Out of the total 778 stocks trading in the exchange, 513 stocks closed in green while 58 stocks closed unchanged at the end of the day. As per data on performance on sectoral indices from the exchange, 16 out of 18 indices closed in green with stocks from technology, automobile, banks, construction, and basic resources sectors saw high gains with over 2% increase in value each. Despite a relatively calm macro calendar schedule in the Asian market hours and lack of high impact headlines, Asian market saw equities and major benchmark indices across key Asian stock exchanges trade in Green today.
The positive price action was the result of bullish cues from US Wall Street and upbeat PMI data in China & U.S.A released yesterday. Positive macro data updates have helped ease concerns of a global economic slowdown influencing positive price action in the Asian market. However, DAX futures trading in the international market was down by 0.34% on the day ahead of the European market hours. The dovish price action was the result of concerns of an economic slowdown in Europe as evident from US-DE spread difference which widened in EURO negative manner once again. The German market is expected to see subdued price action today regardless of momentum when trading begins in European market hours as influence from mixed cues balancing out each other. Investor sentiment is seeing risk on tone over cues from international market but caution ahead of ECB Praet’s speech and influence from dovish macro data are seeing an equal impact in the market. With neither bulls nor bears managing to gain upper hand DAX index and German equities will see rangebound price action.
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