The DAX index is in the green today as traders wait for the recovery fund meeting in Brussels. The index is trading at 12,907 euros, with autos being the best-performing in the index. Other indices in Europe are also in the green today, with Stoxx 40 soaring by 0.20% and FTSE MIB jumping by 0.15%.
German autos jump
Automobiles are the best-performing companies in the DAX index today. Daimler, the maker of Mercedes Benz, is up by more than 3.60%. It is followed by Volkswagen, Continental, and BMW, that are also up by more than 2%. While Continental is not an auto manufacturer, it supplies its products to these companies.
Automakers are up because of a statement released by Daimler. Yesterday, the company said that it will post a 1.68-billion-euro loss in the second quarter. That will be one of its biggest losses in history. The company blamed the situation on the pandemic, that has seen most customers defer their auto purchasing decisions.
However, the shares are jumping because the results were better than what were expecting. Also, it has seen an uptick in purchases in China, its biggest market in the world. Other important news is that the firm will stop manufacturing its Class A vehicles in Mexico as it focuses on higher margin SUVs. Also, it is planning to sell a large factory in France.
Therefore, automakers in the DAX index rose because investors expect them to benefit from the rising demand in China.
DAX index awaits for recovery talks
The DAX index is also rising as traders wait for the outcome of the recovery fund talks that are happening in Brussels. These are the first face to face talks of EU leaders since the outbreak began. As I wrote earlier, analysts believe that the talks will not yield a lot of results because of the wide differences among the sides. Nonetheless, they expect that the situation will improve through summer.
A DAX index would be a major beneficiary of the talks. For one, most of its constituents are among the biggest firms in Europe. As such, they will directly benefit from the capital.
DAX index top movers.
As mentioned above, automobiles are among the best-performers in the DAX index today. They are followed by companies like Infineon, Fresenius, E.ON, and Adidas, that are up by more than 30 basis points. Meanwhile, Deutsche Bank, the best-performer yesterday, is the worst performing stock in the DAX today. It is down by 1.38%. Other worst-performers are Allianz, BASF, Merck, and Siemens.
DAX Index technical outlook
The DAX index is trading at 12,905 euros today. A look at the daily chart shows that this is an important level for several reasons. First, it is along the important resistance level shown in green. As you can see, the price has found it nearly impossible to move above this level.
Also, the price is above the ascending trend line that is shown in black and is also above the 50-day and 100-day exponential moving averages. Therefore, the index is likely to continue rising if it manages to move above this level. However, a drop below 12,358 will invalidate this trend.
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DAX index forecast
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