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DAX futures: German index set for modest gains at the open

We examine where the Germany 30 index is poised to open on Thursday, 9 April.

DAX Source: Bloomberg

The DAX finished out yesterday’s session mostly as we suggested it would begin – that is to say – flat.

Namely, by Wednesday’s close, the German benchmark traded at the 10,332 point level, ending the day down around 0.23%.

Though a lacklustre session overall, Infineon, Adidas and RWE proved to be the best performing stocks from the day; while Siemens, Deutsche Bank and Deutsche Post were the worst performing German Equities.

At 5:55 am (GMT+2), IG Markets data suggests that the DAX is set to open 93 points or 0.91% higher, on Thursday.

Looking at this price action from a technical perspective, IG’s Chief Market Analyst Chris Beauchamp, yesterday wrote:

‘The DAX has bounced strongly from the lows of March, but now we must closely watch the 10,200 area. This was the low from late 2018, which formed the support level for the index’s bounce into 2019. Having moved back to this level, the price has now encountered resistance. A turn lower from here raises the prospect of a move back towards 8400.’

Optimistically, Mr Beauchamp further noted that:

‘A weekly close back above 10,200 brings 11,260 into view, the support level from March and August 2019, and would mean the index is still down 18% from its 2020 highs, but 40% up from its lows for the year.’

This all comes as European finance minsters yesterday failed to come to an agreement regarding a proposed €540 billion Covid-19 rescue package.

Specifically, as the Guardian reported:

‘Negotiations were suspended after a marathon all-night video conference call between the 19 finance ministers of the eurozone ended early on Wednesday morning.’

Ministers are expected to resume talks on Thursday, though doubts remains as to whether they will be able to come to an agreement.

At the time of writing, the global coronavirus case-count stood at 1,518,719.

Global market moves in focus

Though German markets traded flatly on Wednesday, US markets rose strong – with the Dow Jones Industrial Average, the S&P 500 and NASDAQ Composite, all recording impressive gains.

The Dow was the strongest performer here – finishing out the session up 3.44% – at the 23,433 point level.

Commenting on what’s driving market sentiment – Jeffrey Keintop, from Charles Schwab – yesterday told CNBC that 'the market is obsessively focused on the issue at hand; not just the number of new cases, which seems to be slowing down.’

Mr Keintop added that:

'The idea that this economic freefall is actually close to finding a bottom, I think, is the bigger drive for optimism in the markets.'

How to trade the DAX: up and down

What do you make of the current situation: can this optimism be sustained, or will it be short lived? Whatever your view, you can trade indices, currencies and equities – both up and down – through IG’s world-class trading platform now.

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

  • Create an IG Trading Account or log in to your existing account
  • Enter ‘Germany 30’ or ‘DAX’ in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.

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