Dax index slumps after Airbus news
Bad news from aerospace firm Airbus hit European markets, knocking back the Dax after a solid start to the week yesterday.
European shares experienced a downturn on Tuesday, with the Dax index losing 0.5% following bad news from index heavyweight Airbus.
The aerospace sector was hit particularly hard, led by a sharp decline in Airbus shares, which plummeted nearly 11%. This significant drop came after the company announced it was cutting targets and taking a substantial 900 million euro charge for its troubled space activities.
The ripple effect was felt across the aerospace and defence sector, with related companies such as Rolls-Royce and MTU Aero Engines also seeing their stock prices fall.
The impact of Airbus's decline is especially notable given its substantial 6.85% weighting in the DAX index, suggesting a potentially significant influence on the overall German market performance. This sector-wide downturn highlights the interconnected nature of the aerospace industry and the substantial market impact that can result from the performance of key players like Airbus.
Dax technical analysis
The news stifled the rally on the Dax, which had hit a two-week high in Monday’s trading.
Initial losses for the index saw the price drop back towards the 100-day simple moving average (SMA), but buyers came in to defend the lows for the time being.
However, we will need to see a continued recovery to help maintain the bullish view that had been in development yesterday. The price has fallen since the early-May record high, and remains below trendline resistance from that peak.
A close above Monday’s high of 18,357, and above the 50-day SMA (currently 18,366), would help to bolster the bullish view, and put the price on course to target trendline resistance from the May highs.
Sellers will want to see a close below the 100-day SMA, and then below 18,000 and the 14 June low of 17,993, in order to open the way to more downside.
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 an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
