CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

European markets wrap: DAX expected to slump on Wednesday

We examine the recent price action from a number of key European markets as well as look at where DAX futures suggest the German benchmark will open on Wednesday, 27 May.

European markets wrap

European markets followed Asian Pacific indices higher on Wednesday, Wall Street also rose, though the NASDAQ composite proved jittery.

On a more granular level, the Swiss SMI proved to be one of the worst performers, rising just 0.06%, the Italian FTSE MIB gained 1.50%, the French CAC 1.46% and the German DAX rose an even 1%.

Amongst the best performing German equities were Deutsche Bank, up 9.75%; Lufthansa up 6.83% and Continental, up 5.96%. By contrast, Deutsche Boerse, Merck and Fresenius Medical Care were the worst performing German stocks on Tuesday.

This caps off a strong period for the blue-chip German benchmark, posting positive gains during 7 of the last 8 trading sessions. Overall, at Tuesday’s close of 11,500 points, the German DAX sits significantly off the lows it recorded in March.

IG Senior Market Analyst Joshua Mahony, noted that much of the bullish price activity in European and US markets have been driven by optimism around the easing of lockdown measures. From a technical perspective, Mr Mahony noted that:

‘The DAX has reached the highest level since early March. The break through 11,342 brings a breakout from the consolidation mode seen since the beginning of April.’

‘It is difficult to know exactly where this rally ends, yet we do have to keep an eye out for the 61.8% Fibonacci resistance level at 11,592. For the bears, it is worthwhile watching to see if we get a bearish break below the 80 level on the stochastic oscillator.’

As of 2:40 AM (GMT+2), IG Markets data suggests that the DAX is set to open around 52 points or 0.44% lower.

US markets trade bullishly

Elsewhere, US markets posted mostly strong gains on Tuesday, with the Dow Jones Industrial Average rising 2.17%, the S&P 500 gaining 1.23%, while the NASDAQ Composite eked out a gain of just 0.17%.

Adding to the prospect of reopened economies, markets look to have been boosted by news that US biotech Novavax had started the first human trial of its Covid-19 vaccine. Unsurprsingly, the Novavax (NVAX) share price rose 4.43% on Wednesday.

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

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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