The DAX index is up slightly today as traders react to the upbeat jobs numbers from the United States. The index is trading at €12,622, which is higher than yesterday’s low of €12,246. Most companies in the index are in the green with just a handful being in the red.
Deutsche Bank expresses interest in Wirecard Bank
Deutsche Bank share price is down by about 0.50% at €8.5 as traders reflected on the announcement that the company was considering bailing out Wirecard Bank.
For starters, three weeks ago, Wirecard was among the biggest technology groups in Germany, valued at more than €5 billion. The company went burst almost two weeks ago when its auditors failed to locate almost €2 billion in its balance sheet.
While the company was a payment provider, it also owned a bank in Germany that had more than €1.9 billion in total assets. The bank is not part of the parent’s company insolvency proceedings. In a statement yesterday, Deutsche Bank, which is also a troubled lender, said that it was considering providing financial support to the bank. It said:
“We are in principle prepared to provide this support in the context of a continuation of business operations, if such assistance should become necessary.”
The problem for Deutsche Bank is that it is also in trouble. The company is doing a restructuring operation that will see more than 8,000 jobs gone.
Wirecard share price rose by more than 11% in the morning session. That is also because some buyers have expressed interest in its American business.
Delivery Hero sales jump
Meanwhile, the DAX index is reacting to upbeat numbers from Delivery Hero, the technology company that provides delivery companies. In a report, the company said that the order numbers rose by almost 94% compared to the same quarter in 2019.
That growth was expected since most people were staying at home. Its gross merchandise volume rose by 64% in the second quarter. While Delivery Hero is not part of the DAX index, the improvement sends signals that the German economy was doing well.
Top movers in DAX index
Wirecard share price was the best-performing in the DAX index today. It is being followed by Heiderlbergcement, Infineon, RWE, Merck, and Daimler, whose shares have all jumped by more than 1%. Meanwhile, the top losers in the DAX were Lufthansa, Adidas, BASF, and Allianz. These ones have dropped by almost 0.50%.
DAX index technical analysis
The DAX index is trading at €12,622. On the daily chart, this price is above the 50-day and 100-day exponential moving averages. The price has also moved above the 78.6% Fibonacci retracement level. (This retracement joins the highest and lowest levels this year). The price is also above the ascending trendline that is shown in black. Therefore, the index is likely to continue rising as bulls attempt to retest June’s high of €12,938.
On the flip side, a move below €12,000 will invalidate this prediction. This is an important psychological price that is also at the intersection of the ascending trendline and the lowest level on June 29.
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