FTSE 100, DAX 40 and DOW remain under pressure due to renewed banking woes
Outlook on FTSE 100, DAX 40 and DOW as First Republic Bank’s share price drops by up to 50%.
FTSE 100 remains under pressure
The FTSE 100 continues its slide which began on Monday, taking its cue from a negative lead on Wall Street which declined as the First Republic Bank share price at one point slid by up to 50% on news that its deposits fell by $100bn in Q1 and as it announced staff cuts of around 20%.
So far the FTSE 100 slid to 7,855, practically to the 7,854 late February low which acted as support. If it and the 7,850 10 February low were to be fallen through, the late January high at 7,812 would be targeted.
Further consolidation below last week’s high at 7,938 remains at hand, a rise above would engage the early March high at 7,976 as well as the psychological 8,000 mark, however.
DAX 40 sideways trades below its 15-month high
The Germany 40 remains range bound and continues to trade between its 15-month high at 15,923 and last week’s low at 15,704.
Despite better-than-expected earnings by the likes of Alphabet Inc - C (All Sessions), Microsoft Corp (All Sessions) and Visa Inc (All Sessions) overnight and strong Germany GfK Consumer Climate Indicator data earlier this morning, the DAX 40 remains under pressure as the disappointing news from First Republic Bank weighed on banking stocks, especially in the US but to some degree in Europe as well.
The German GfK Consumer Climate Indicator jumped to a 13-month high and increased for a seventh straight month to -25.7 heading into May of 2023, the highest since April 2022, and compared with market forecasts of -27.9.
Resistance remains to be seen at last week’s highs at 15,915 to 15,923. Above it lurks the psychological 16,000 mark and sit the November 2021 and January 2022 highs at 16,288 to 16,298.
Support below Tuesday’s low at 15,785 can be found at the 15,742 early April high. Further down sit the 15,709 March high and last week’s low at 15,704. While it underpins, medium-term upside pressure should prevail.
Dow drops on renewed banking fears
The Wall Street has been negatively impacted by worries surrounding First Republic Bank’s solvency as its share price fell by up to 50% on Tuesday, reignited fears of contagion.
The Dow’s rejection last week by the December-to-April downtrend line at 34,133 has led to a drop to Tuesday’s 33,527 low, a slip through which may lead to a fall towards the March-to-April uptrend line at 33,410 taking place. Further down potential support can be found at the 10 April low at 33,332.
Strong resistance above this week’s high at 33,894 comes in at the 34,105 to 34,133 mid-April highs.
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