DAX futures edge lower amid coronavirus uncertainty

DAX futures edge lower as investor uncertainty grows amid the Covid-19 crisis, with German equities likely to extend their losses at market open on Friday.

DAX futures are trading marginally lower as investors grow concerned that Covid-19 lockdown restrictions could be eased too quickly and bring about another spike in cases.

With DAX futures edging lower overnight, German equities are likely to extend their losses at market open on Friday.

So far this week, German stocks have come under heavy pressure, with the blue-chip index down 5% after falling more than 500 points over the last four sessions.

The DAX closed 1.95% lower on Thursday to 10,337.02.

DAX drops into critical support level

The DAX appears to be ahead of the FTSE 100 in its decline, with the pair breaking trendline support to trade within touching distance of the critical 10,369 low from early May, according to Josh Mahony, senior market analyst at IG.

‘A break below that point would signal a high likelihood that we have seen this market top out. Nevertheless, with the stochastic looking to have potentially bottomed out, a break through the 20 level could bring a bullish swing in momentum,’ Mahony said.

‘Ultimately, the outlook for the DAX will be determined by the ability or inability to break through the 10,369 low,’ he added.

German banks suffer heavy losses due to Covid-19

The shares of Deutsche Bank and Commerzbank have come under significant pressure this week, with the pair falling by more than 8% over the last four sessions as they both set aside cash to cope with potential loan losses as a result of the coronavirus pandemic.

Both German lenders reported disappointing first quarter results, but Commerzbank performed particularly poorly, with the bank posting a loss of €295 million euros, down from a profit of €122 million in the same period last year.

Deutsche Bank closed at €6.05 per share on Thursday, while Commerzbank finished at €2.96.

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