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DAX futures soft, Wirecard to be closely watched on Friday

As DAX futures trade softly, investors will likely be closely watching Wirecard after the company’s CEO said that ‘fraud of considerable proportions’ could not be ruled out.

European markets at a glance

Many key European markets fell on Thursday – with the Swiss SMI, Italian FTSE MIB, French CAC and German DAX all registering losses.

The Germany 30 benchmark was the worst performing of those indices, falling 0.81% or 100 points, to finish yesterday's session at the 12,281 point level.

On a more granular level, BASF, Covestro and Vonovia were the best performing German equities; while Henekl vz, Lufthansa and Wirecard were the worst performing stocks on Friday.

Wirecard share price falls following missing cash revelation

The biggest story on Thursday came from payments giant Wirecard (WDI), with the company revealing that €1.9 billion – representing approximately one quarter of the firm’s balance sheet – couldn’t be located by auditors.

Here, Wirecard said that its auditor – Ernst & Young (EY) – told the company that ‘no sufficient audit evidence could be obtained so far of cash balances on trust accounts to be consolidated in the consolidated financial statements in the amount of EUR 1.9 billion.'

In response to this, Wirecard has again pushed back the release of its annual 2019 results, with management saying that it is working ‘intensively’ to clarify the situation.

In saying that, the company warned that ‘If certified annual and consolidated financial statements cannot be made available until June 19, 2020, loans made to Wirecard AG amounting to approximately EUR 2 billion can be terminated.’

Adding to all this, on Friday, Wirecard’s CEO Markus Braun said in a video statement that:

‘At present it cannot be ruled out that Wirecard AG has become the aggrieved party in a case of fraud of considerable proportions.’

Investors will likely be closely watching Wirecard’s stock on Friday after it finished yesterday’s session down a staggering 61.28% at €39.90 per share.

For reference, Wirecard traded at around €151 per share a year ago.

DAX futures point to slightly lower open

In more general terms, at of 5:33am (GMT+2) DAX futures currently suggest the market will open 17 points or 0.14% lower on Friday, 19 June.

From a technical perspective, IG’s Senior Market Analyst, Joshua Mahony yesterday wrote:

‘The DAX saw a similar breakdown below key support overnight, with the drop through the 12,217 level signalling the potential for another bearish phase for the index. With the price already at the 76.4% Fibonacci resistance level (12,369), we are already at a crucial crossroads where the index would have to start turning lower before long for the bearish picture to emerge.’

How to trade global markets – long or short

What do you make of the current situation: do you see bullish or bearish opportunities? Whatever your view, you can trade indices, currencies and equities – both up and down – through IG’s trading platform now.

For example, to buy (long) or sell (short) the DAX using CFDs, follow these easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Germany 40’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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