DAX retreats below 9000

Deutsche Bank has provided a drag on the DAX today, holding the index back from making a concerted break through the 9000 level.

Earnings results for Deutsche Bank are less than impressive, and have served to keep a cap on most other European banks since early trade. A 98% drop in pre-tax profit for the quarter, to a meagre €18 million, is not something that will sit well with shareholders. The litigation reserves for the bank have risen to €4.1 billion, and until we get a clearer picture on the level of settlement needed to deal with the Libor scandal investigations we can expect a degree of aversion towards this particular bank and indeed the sector.

Infineon Technologies has recovered some of its poise today, having shed some 5.5% over the past week, and has taken the top spot with the share price adding 1.9%.

Following a clear uptrend since June 2012, the DAX index has been looking overbought for the past week, so a degree of profit-taking is probably inevitable. Support at 8930/50 has held, coinciding with the 100H moving average. Any breaches of this level should be contained to 8785. Any move through the 9044 levels will be likely to invite further upside.

DAX chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research 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 and quarterly summary.