Asian tech weakness keeps investors cautious
Asian equity markets extended their consolidation at the start of the week, with technology stocks once again coming under selling pressure. Investors remain caught between two opposing narratives: whether the semiconductor cycle still has further room to run, or whether the sector is heading for a more pronounced correction. As a result, many richly valued semiconductor companies are suddenly being viewed through a far more cautious lens.
DAX impact likely to stay limited
For the DAX, however, the direct impact of this development is likely to remain limited. Germany's benchmark index has relatively little exposure to pure technology companies, and the sector accounts for only a small weighting overall.
The more relevant question is whether the recent rotation into cyclical stocks will continue. Over the past few sessions, companies from the chemicals, industrial engineering and automotive sectors have enjoyed a notable revival.
German orders add to recovery hopes
German manufacturing orders added some support to this more constructive outlook, rising 1.9% month-on-month in May and coming in ahead of market expectations. The figures offer further evidence that parts of the German economy may be gaining momentum after a prolonged period of weakness, although the recovery remains uneven.
Eurozone prices and US ISM data in focus
Today's economic calendar is relatively light, although eurozone producer prices and the US ISM purchasing managers' index later this afternoon could still provide fresh market direction. From a technical perspective, the DAX is expected to trade within a range of 25,700 to 25,950 points during today's session.
