Dax Index

DAX index: Down for 2 days in a row as Wirecard shares nosedive

The DAX index is down by 0.70% today as worries of global growth remained. The weakness in the DAX and other European stocks followed a relatively successful session in Asia. In China, the Shanghai composite index rose to its highest level since 2018 while the Hang Seng index rose by more than 0.40%. Other indices in Europe are in the red also, with the CAC 40 and FTSE 100 falling by 0.85% and 0.60% respectively.

Most companies in the red

Most companies in the DAX index are in the red today, with Wirecard, Adidas, Lufthansa, Infineon, Heidelbergcement, and Allianz being the worst-performers. All these stocks have declined by more than one per cent. Only two companies in the index are in the green today; Deutsche Post and Fresenius.

There are two main concerns in Europe today. First, the number of coronavirus cases in the United States is on an upward trend. Health officials confirmed more than 3 million, which represents a third of all confirmed cases worldwide. This happened as more states reported more than 10,000 new cases yesterday. In total, the country reported more than 50,000 cases. At the same time, the death rate in the country rose.

Second, the World Health Organisation is warning of airborne spread of coronavirus. This happened after a team of experts urged the organisation to update its guidance on the disease. If it is the case, the implication to the world economy and the DAX index would be dire because it would decrease the methods to prevent it.

Meanwhile, investors are still reacting to an expose by the Financial Times. In a statement yesterday, the paper revealed that international investors bought bonds that were backed by crime proceeds of an Italian mafia.

Another reason why the DAX index is falling today is a report by the European Commission. In a statement, the commission said that it expected the European Commission economy to contract faster than previously expected.

DAX index technical outlook

The DAX index is down for the second straight day. It is trading at €12,565, which is slightly higher than the day’s open of €12,495. On the daily chart, the price is slightly above the 50-day and 100-day exponential moving averages. It is also above the ascending trend line that is shown in green. This line connects the lowest level on May 14 and June 30. Also, the price is along the 78.6% Fibonacci retracement level. Therefore, even with the decline today, the index is likely to maintain the upward trend.

However, a decline below €11,928 will invalidate this trend. This price is at the intersection of the ascending trend line and the lowest level on June 30.

Don’t miss a beat! Follow us on Telegram and Twitter.

DAX index forecast

DAX index

More content

Related Posts: