DAX poised for a strong start to Friday’s session

Signs of optimism emerge

Key US indices put in a solid session yesterday, with the Dow Jones Industrial Average, the S&P 500 and the NASDAQ Composite all finishing out the session in the green.

Much of this optimism looks to be driven by news that a Covid-19 drug developed by US-based biotech Gilead Sciences had shown early signs of success, with a number of patients being treated with the experimental drug seeing rapid signs of recovery.

In response to this news, MarketWatch sensationally wrote:

‘Gilead stock pops in after-hours trading; experimental drug remdesivir is considered a front-runner in the race to develop a treatment for COVID-19 infections.’

The Gilead share price did indeed ‘pop’ in after-hours trade, rising as much as 16.41% – to ~US$89 per share, off the back of this news.

According to Bloomberg Data, Dow futures are currently pointing to a positive open.

DAX also set to surge

Off the back of these developments, as of 5:59 AM (GMT+2), IG Markets data is suggesting that the German DAX will open some 240 points or 2.33% higher on Friday, 17 April.

Yesterday though, the DAX proved more sluggish, rising just 0.21%, to finish out the session at the 10,301 point level, taking the German benchmark’s gains over the last month to around 17.84%.

Amongst that middling session, the best performing German equities were Deutsche Borse, Fresenius Medical Care and Merck; while MTU Aero Engines, HeidelbergCement and Allianz were the worst performing.

Commenting on these market moves from a technical perspective, IG’s Senior Market Analyst, Joshua Mahony, yesterday posited that:

‘A break below that 10,152 level would bring about a more bearish picture into play. Given that depth of yesterday's decline, there is a possibility that this is going to be a retracement move before we turn lower.’

Elsewhere, DailyFx Strategist Paul Robinson, said:

‘But for now, as long as the DAX stays above the lower trend-line then the trend still remains pointed upward in the near-term, and could still bring gap-fills over 11k into play on further strength. A resolution one way or another appears to be nearing.’

Global markets in focus

Besides the German DAX, other European markets notched up a middling session on Thursday, with the Italian FTSE MIB gaining just 0.29%, the Swiss SMI rising 1.28%, while the French CAC fell 0.08%.

When Asian Pacific markets opened this morning they look to have benefitted from the optimism swirling around Gilead’s experimental Covid-19 drug, with the Australian ASX 200, the Chinese China A50 and the Japanese Nikkei 225 all rising.

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