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European markets wrap, DAX poised to open lower on Wednesday

We examine how key European markets performed on Tuesday, as well as how the DAX is poised to open on Wednesday.

European markets wrap Source: Bloomberg

European markets wrap:

  • Key European markets post lacklustre gains on Tuesday
  • DAX poised to open lower on Wednesday
  • The Euro Dollar last traded at 1.09325

European markets struggled to sustain the blockbuster gains they recorded on Monday – with the Italian FTSE MIB and French CAC 40 both falling. The German DAX and the Swiss SMI recorded middling gains by comparison.

CAC 40, SMI and FTSE MIB and DAX trade flat

Of the four European indices mentioned above, the Swiss SMI proved the best performing on Tuesday, trading some 23 points or 0.24% higher to finish out the session at the 9,764 point level. The German DAX wasn't far behind the Swiss benchmark yesterday, eking out a small gain of 0.15% to end out Tuesday’s session at 11,075 points.

On a more granular level, Sika, Geberit and Swatch were the best performing Swiss equities; while Indineo, Allianz and MTU Aero Engines were the best performing German stocks.

Looking at the German markets from a technical perspective, IG Senior Market Analyst, Joshua Mahony on Tuesday said:

‘To the upside, the major resistance level we need to break comes in the form of 11,342. If that happens, we would be looking at an exit of the consolidation that has dominated since early April. However, the same caveat has applied given the consolidation in play over almost two months.’

Mr Mahony finished by saying:

'As such, there is a possibility of the bears coming back into play if the price breaks back below 11,035 and the stochastic breaks below 80. Until then, the bullish short-term trend remains in play.'

IG data currently suggests that the DAX is set to fall on Wednesday, with DAX June futures trading some 59 points or 0.53% lower, at the time of writing.’

The catalyst behind these market moves

On Monday, global markets surged off the back of news around a potential Covid-19 vaccine being trialled by Moderna Therapeutics, as well as bullish comments from US Fed Chair Jerome Powell.

Yet what buoyed markets on Monday looks to have spurred the opposite reaction on Tuesday, as experts questioned the information Moderna disclosed about its potential Covid-19 vaccine.

Speaking to the ambiguity of the current situation, health-focused news site STAT reached out to a number of vaccine experts, who ‘concluded that, based on the information made available by the Cambridge, Mass.-based company, there’s really no way to know how impressive — or not — the vaccine may be.’

The Moderna share price fell 10.41%, to US$ 71.67 per share during Tuesday’s session and continued to trend lower in after-hours trade.

Elsewhere, the Euro Dollar (EUR/USD) has trended higher over the last five sessions, last trading at 1.09325.

How to trade financial markets: long and short

What do you make of the current environment: do you see bullish or bearish opportunities? Whatever your opinion, you can trade indices, currencies and equities – both LONG or SHORT – with IG’s world-class 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 30’ 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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