DAX futures edge lower amid coronavirus uncertainty
DAX futures edge lower as investor uncertainty grows amid the Covid-19 crisis, with German equities likely to extend their losses at market open on Friday.
DAX futures are trading marginally lower as investors grow concerned that Covid-19 lockdown restrictions could be eased too quickly and bring about another spike in cases.
With DAX futures edging lower overnight, German equities are likely to extend their losses at market open on Friday.
So far this week, German stocks have come under heavy pressure, with the blue-chip index down 5% after falling more than 500 points over the last four sessions.
The DAX closed 1.95% lower on Thursday to 10,337.02.
DAX drops into critical support level
The DAX appears to be ahead of the FTSE 100 in its decline, with the pair breaking trendline support to trade within touching distance of the critical 10,369 low from early May, according to Josh Mahony, senior market analyst at IG.
‘A break below that point would signal a high likelihood that we have seen this market top out. Nevertheless, with the stochastic looking to have potentially bottomed out, a break through the 20 level could bring a bullish swing in momentum,’ Mahony said.
‘Ultimately, the outlook for the DAX will be determined by the ability or inability to break through the 10,369 low,’ he added.
German banks suffer heavy losses due to Covid-19
The shares of Deutsche Bank and Commerzbank have come under significant pressure this week, with the pair falling by more than 8% over the last four sessions as they both set aside cash to cope with potential loan losses as a result of the coronavirus pandemic.
Both German lenders reported disappointing first quarter results, but Commerzbank performed particularly poorly, with the bank posting a loss of €295 million euros, down from a profit of €122 million in the same period last year.
Deutsche Bank closed at €6.05 per share on Thursday, while Commerzbank finished at €2.96.
How to trade indices with IG
Looking to trade the DAX and other major indices? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:
Create an IG trading account or log in to your existing account
Enter ‘DAX Index’ in the search bar and select it
Choose your position size
Click on ‘buy’ or ‘sell’ in the deal ticket
Confirm the trade
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa 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 full non-independent research disclaimer and quarterly summary.
Take a position on indices
Deal on the world’s major stock indices today.
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only