New Records, But a Secure Ascent Looks Different
On Thursday, the DAX once again made a statement, and that too early in the trading day. A new record high was quickly followed by profit-taking, which at first glance made the DAX appear weak. However, by the end of the trading day, the index had still gained 1.47 percent and closed at 23,419 points, remaining stable above 23,000 points. Investors and traders must be aware, though, that a secure ascent can look quite different. Even the anticipated ECB interest rate cuts failed to provide any significant boost.
Deutsche Post's stock made a strong move on Thursday, surging by over 14 percent. This gain was thanks to DHL’s cost-cutting program, which was well received by investors, attracting significant capital. In second place was automotive supplier Continental, which climbed by more than 6.7 percent. Exemptions from US tariffs have generally lifted sentiment in the automotive sector.
For the outlook on Friday, based on the chart pattern, further profit-taking by investors seems likely, which could lead to a decline in the DAX. However, despite all the cautionary warnings, it is also possible that the index could continue its rally on Friday.
British Stock Index Under Pressure – Pound Strong
The British FTSE 100 stock index continued its correction on Thursday. The index closed down 0.7 percent, once again reaching its low from the previous week. Following a weak economic report, Melrose shares plunged by a staggering 17 percent. Overall, investors in the UK reacted with concern to the economic data. While a further sell-off has not yet been confirmed, the likelihood of a deeper correction is increasing. If the index falls below 8,650 points, such a scenario could become a reality.
Meanwhile, the British pound remains on the rise, continuing its upward trend. Although advancing cautiously, the pound is trading convincingly at 1.288, just below the 1.29 USD mark. However, caution is advised, as a strong resistance level at 1.29 USD needs to be overcome.
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.