DAX futures soft, Wirecard to be closely watched on Friday

As DAX futures trade softly, investors will likely be closely watching Wirecard after the company’s CEO said that ‘fraud of considerable proportions’ could not be ruled out.

European markets at a glance

Many key European markets fell on Thursday – with the Swiss SMI, Italian FTSE MIB, French CAC and German DAX all registering losses.

The Germany 30 benchmark was the worst performing of those indices, falling 0.81% or 100 points, to finish yesterday's session at the 12,281 point level.

On a more granular level, BASF, Covestro and Vonovia were the best performing German equities; while Henekl vz, Lufthansa and Wirecard were the worst performing stocks on Friday.

Wirecard share price falls following missing cash revelation

The biggest story on Thursday came from payments giant Wirecard (WDI), with the company revealing that €1.9 billion – representing approximately one quarter of the firm’s balance sheet – couldn’t be located by auditors.

Here, Wirecard said that its auditor – Ernst & Young (EY) – told the company that ‘no sufficient audit evidence could be obtained so far of cash balances on trust accounts to be consolidated in the consolidated financial statements in the amount of EUR 1.9 billion.'

In response to this, Wirecard has again pushed back the release of its annual 2019 results, with management saying that it is working ‘intensively’ to clarify the situation.

In saying that, the company warned that ‘If certified annual and consolidated financial statements cannot be made available until June 19, 2020, loans made to Wirecard AG amounting to approximately EUR 2 billion can be terminated.’

Adding to all this, on Friday, Wirecard’s CEO Markus Braun said in a video statement that:

‘At present it cannot be ruled out that Wirecard AG has become the aggrieved party in a case of fraud of considerable proportions.’

Investors will likely be closely watching Wirecard’s stock on Friday after it finished yesterday’s session down a staggering 61.28% at €39.90 per share.

For reference, Wirecard traded at around €151 per share a year ago.

DAX futures point to slightly lower open

In more general terms, at of 5:33am (GMT+2) DAX futures currently suggest the market will open 17 points or 0.14% lower on Friday, 19 June.

From a technical perspective, IG’s Senior Market Analyst, Joshua Mahony yesterday wrote:

‘The DAX saw a similar breakdown below key support overnight, with the drop through the 12,217 level signalling the potential for another bearish phase for the index. With the price already at the 76.4% Fibonacci resistance level (12,369), we are already at a crucial crossroads where the index would have to start turning lower before long for the bearish picture to emerge.’

How to trade global markets – long or short

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  4. Click on ‘buy’ or ‘sell’ in the deal ticket
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