Dax index slumps to two-week lows as investors selling risky assets amid fresh fears of a second wave of coronavirus infection that might out the recent recovery in jeopardy. Feds outlook that the recovery will be a long term process also weigh on investors sentiment.
The number of virus infections in the U.S. passed the two million cases and over 112,000 deaths, as the seven-day average of new infections the last two weeks is still rising in more than 20 states across the country. Treasury Secretary Steven Mnuchin said the U.S. shouldn’t shut down the economy again even if there is another surge in COVID-19 cases.
Dax index ended 4.47% lower at 11,970, but the Dax futures continue the slide and as of writing is 4.52% lower at 11,924. Lufthansa is 9.09% lower at 10.16, Volkswagen is 7.52% lower at 132.42, Deutsche Bank is 6.99% lower at 8.13 and Daimler is 8.98% lower at 35.32.
FTSE 100 index in London ended 3.99% lower at 6,076 while the CAC 40 index finished 4.71% lower at 4,815. In Wall Street the Dow Jones Industrial Average is 5.50% lower at 25,502, the S&P 500 is 4.61% lower at 3,043 while the Nasdaq is 3.87% lower at 9,633.
Dax index finished 4.47% lower at 11,970 breaking the 200-day moving average opening the way for further correction. The bullish momentum has cancelled now, and only a return above the 200-day moving average can give the bulls the upper hand.
On the downside, initial support for the Dax index stands at 11,970 the daily low. In case the Dax index breaks lower, then the next support is at 11,480 the 100-day moving average. Below 11,480 the next support area will be met at 11,154 the low from May 25.
On the flip side, first resistance for the Dax index is at 12,138 the 200-day moving average and then at 12,301 the daily high. A move above 12,301 would target 12,776 the high from yesterday’s trading session.