Higher government bond yields and rising energy prices are creating something of a hangover for the DAX following last Friday’s record high, while also weighing modestly on other global equity markets this week.
Support continues to come from semiconductor stocks such as Nvidia and Micron, which are enjoying renewed investor interest following their recent corrections. While investors are becoming somewhat more cautious overall, market sentiment remains constructive. The modest losses can therefore still be viewed as a healthy interim correction. Trading in Asia also remains largely driven by the technology sector, with slightly better-than-expected economic data from Japan providing additional support.
In Frankfurt, the DAX is likely to continue testing the waters above the 26,000-point mark today. So far, there is little evidence of any meaningful selling pressure. Instead, investors continue to show selective buying interest in individual stocks such as Merck, Symrise and Infineon. RWE and Rheinmetall are also attracting demand in pre-market trading.
A broad range of economic and inflation data is scheduled for release during the session. The main focus will be on European purchasing managers’ indices and inflation data, as well as the ISM PMI and JOLTS job openings data from the United States. From a technical perspective, the DAX is expected to trade within a range of 26,100 to 26,350 points today.
