DAX shaken by taper fears

The German equity benchmark is still in the red after traders were spooked by the Federal Reserve’s statement last night.

The US central bank warned it may be reducing its $85 billion-per-month bond-buying scheme in coming months, and the DAX opened 0.4% lower this morning as investors digested the news. Some feel that tapering may begin in December, and as a result the Fed’s statement weighed on equity markets around the world.

Meanwhile, the latest German manufacturing and services purchasing managers indices (PMI) came in at 52.5 and 54.5 respectively, both topping analysts’ expectations. This helped the German equity market pull back some of its early losses.

France also announced its manufacturing and services PMI data for the month of November this morning. Both reports missed the market consensus, demonstrating that these sectors are still in contraction. This highlights the difference between the two countries.

The German market may be offside today but the index is still in an uptrend. The market is up 22% year-to-date, and this dip could provide a buying opportunity.

Germany 30 chart

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