Daily Analysis DAX40 - 6 Sep 2023

European stocks continued their decline for a sixth consecutive session on Wednesday due to concerns about slowing global economic growth and rising crude oil prices, which are fueling inflationary worries.

Global sentiment turned negative as Brent crude prices (BRN1!) surged above $90 per barrel on Tuesday, following Saudi Arabia and Russia's decision to extend voluntary supply cuts until the end of the year, leading to concerns about persistent inflationary pressures.

Although oil prices retraced slightly, government bond yields, particularly the German 10-year yield (DE10YT=RR), surged to a two-week high at 2.65%.

Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, emphasized the role of energy prices as significant drivers of inflation and the potential disruption caused by high crude oil prices.

The pessimistic sentiment from August continued into this month, with worries about the duration of major central bank's high-interest rate policies amid indications of economic weakness in China and Europe.

Klaas Knot, a member of the ECB's governing council, cautioned that investors underestimating the possibility of a European Central Bank interest rate increase next week could be mistaken. Currently, money market futures indicate only a 33% probability of a 25 basis point rate hike at the ECB's September 14 meeting.

Meanwhile, the Federal Reserve is expected to maintain rates in the 5.25-5.50% range later this month.

Further indicating a slowdown in economic growth, data revealed that German industrial orders fell more than anticipated in July, reversing the previous month's sharp rise, particularly in the aerospace sector.

Market sentiment worsened on Tuesday as surveys indicated a contraction in Germany's services sector for the first time this year and a larger-than-expected shrinkage in France's services sector due to weak demand.

Among individual stocks, Telefonica (TEF) saw a 2.2% increase after Saudi Arabia's STC Group (7010) acquired a 9.9% stake in the Spanish company, valued at 2.1 billion euros ($2.25 billion), making it the top shareholder.

In contrast, Vestas Wind Systems (VWS) experienced a 5.2% decline following an "underweight" rating from Barclays.

InPost (INPST) surged by 9.8% after the Polish company reported a higher quarterly core profit margin.

The current price range encompasses support at 15,500 and resistance at 16,400. In the short term, the forecast suggests that if DAX surpasses the 16,000 mark, there's a possibility of it advancing towards 16,500, even after retracing to the 15,500 level.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200