The DAX index rose by more than 1.62% as the market remained optimistic about the global recovery. This was in reaction to the relatively positive industrial production data from China that were released earlier today.
Germany stocks rise on positive China industrial data
The main catalyst for the DAX index today was the positive industrial production data from China. The data showed that the country’s industrial production rose by 3.9% in April, after contracting by more than 1.1% in the previous month. This sent a signal that it was possible for countries to bounce back after the coronavirus pandemic slows down.
China is an important country for most companies in the DAX index. Automobile companies like BMW and Volkswagen do most of their business in the country. The same is true with other companies in the index like SAP, BASF and Bayer.
Best and worst performers in the DAX
All companies in the DAX were in the green today, with BMW being the only laggard. Its stock price dropped by more than 3% as the company got criticized for paying dividends to investors worth more than $1.8 billion. In a statement, the company said that the dividends were for 2019, a year in which the company’s revenue rose to more than 100 billion euros. The investors will receive 2.50 euros per share.
The DAX index declined to an intraday low of 10,181, which was along the 38.2% Fibonacci retracement yesterday. As it did this, the index formed a hammer pattern. Today, the index has moved upwards, which is an indication that buyers are coming back. Due to the hammer pattern, there is a possibility that the previous upward trend will continue. However, buyers will need to move above the 50-day EMA at 10,740.
On the contrary, a close below the yesterday’s low of 10,181 will signal that sellers are prevailing. This will lead to the index moving past the 38.2% retracement to below 10,000.