German equity market saw relatively positive performance in Frankfurt stock exchange yesterday with all three major indices closing in green. While DAX index fell sharply on Monday over Euro area’s political and economic woes and weak macro data, optimism surrounding Sino-U.S. trade talks helped boost DAX index’s performance significantly. Bulls were highly active across yesterday’s trading session which helped the index move nearly 200 points higher compared to Monday’s lows. Comments from Irish PM Leo Varadkar who stated that EU is ready to provide further written clarification on Irish backstop agreement to help PM May push her deal through UK parliament also improved investor sentiment in European markets giving major indices a bullish boost.
Positive Headlines On Sino-U.S Trade Talks Stoked Risk Appetite In Broad Market
At close in Frankfurt exchange yesterday, 493 of 778 stocks closed in green with stocks from Food & Beverages, Industry & Software sectors seeing most positive price action. Three major indices DAX, MDAX & TECDAX indices closed for the day up by 0.52%, 1.42% & 0.29% respectively. Despite ongoing political issues & partial government shutdown, Wall Street indices closed in green with significant gains supported by Sino-U.S. trade talk related optimism. US President Donald Trump tweeted that trade talks with China is going well which gave equity markets and investor sentiment in broad market a bullish boost. While the trade talks between two parties has extended into unplanned third day, headlines indicating positive progress has stoked investor risk appetite significantly. All major equity indices in key Asian markets were up by more than 0.75% on the day supported by trade talk related optimism.
Meanwhile a recovery in crude oil price in broad market also supported risk appetite as increased demand for crude oil consumption is viewed as sign of growing/healthy economy. Germany being a trade oriented economy is highly susceptible to international market performance. Cues from both Wall Street and Asian equity markets are positive which suggests that German equities could open positive and trade with bullish bias across the day. DAX index trading in international market ahead of Frankfurt market opening was up by 0.61% on the day which also supports possibility of bullish price action in German stock market today. Dax hit intra-day high’s in 10900 price range yesterday which when taken into account with ongoing positive global equity market cues suggests possibility of sharp upward price action with aim to breach 10950 mark in today’s European trading hours.
This article was originally posted on FX Empire
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