Dax Index

DAX Index Slide, BASF lower On Earnings Warning

Dax index started muted the session as investors await the Fed decision later on the day. Markets are assessing the risks from the rising numbers of coronavirus cases and the rise in tensions between the USA and China. On the other hand speculation for a new stimulus package in the USA and some earnings report that beat the market consensus provide some help for risky assets and global equities.

Investors don’t expect any changes in the monetary policy from the Fed today. The interest rates are at 0-0.25% at will stay at that level. Fed will reiterate the will to do whatever it takes to support the economy and might express some concerns on the rising number of coronavirus cases that may halt the recovery process.

Dax getting a hand today by Vonovia +1.87% higher at 55.70, Adidas is +1.47% higher at 242.30, SAP is 0.87% at 138.96. On the other hand, BASF is 5.55% lower at 49.19 after the company said it doesn’t see any improvement in the next quarter, and also it will not provide guidance for the year as the environment it is still cloudy amid the coronavirus crisis. The company reported a 12% drop in sales for the 2Q. Volkswagen is -2.20% at 138.68, and BMW is 2.17% lower at 58.62.

Dax Index Daily Analysis

Dax index is 0.27% lower at 12,803, in a muted session as the index approaches the rising trend line from the March lows. I don’t expect any significant move before the Fed’s decision later on the day. If we see a break below the supportive trendline, then Dax might be in trouble and a correction down to 12,364 the 50-day moving average looks possible. 

Bulls look tired and need a return above 12,944 the high from July 28, to gain some traction. The next critical resistance for the index stands at 13,218 the high from July 23.  

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Dax Index Daily Chart

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