DAX holds on to 9700

The German equity benchmark is still above the important 9700 level, despite poor results from Deutsche Bank.

The DAX is off 0.4% after Deutsche Bank revealed a fourth-quarter loss of €1.15 billion, largely caused by legal costs. The bank had suffered a drop in bond-trading revenue, and last year over 70% of its total revenue was derived from bond trading, so the 31% decline in fourth-quarter fixed-income earnings was a major hit. Not only did Deutsche Bank reveal a drop in revenue, but it was also hit with fines totalling €2.5 billion. Some of these were penalties relating to mortgage-backed securities sold between 2005 and 2007.

Last week the DAX closed at a record high, and today it has still managed hold its ground above the 9700 level, which is impressive considering the poor results from Germany’s largest bank. The US equity market is shut today and trading volumes around the world are low, so the selloff could have been worse.

Germany will announce the ZEW investor sentiment report tomorrow at 10am. If the figure exceeds the expectations of 63.4, we could see the market head towards the 9800 level.

As Brenda Kelly explained, the market is in an uptrend. So we may find traders buying the dip.

Germany 30 chart

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