DAX 30 Slips in Early Trading After Starting With Gains

on Nov 21, 2016

The DAX 30 finished Friday with down 0.2% after an early afternoon recovery failed to hold to the end of the day and the index dropped in late trading. Soft economic data dragged on the DAX after the Eurozone’s current account surplus dropped in September, down to 25.3 billion euro from 29.1 billion in August. Data from Destatis showed that German’s producer prices dropped more slowly than had been expected in October, down 0.4% on the previous year after September had shown a 1.4% decline.

Volkswagen’s announcement that it would shed 30,000 global jobs as part of a restructuring process saw its share price shed 0.66%, though the announcement was generally greeted in a positive fashion. The rest of the automotive industry benefited, with DAX constituent BMW adding 0.88%.
The DAX started this morning higher but at 10:00 am CET, has fallen back to Friday’s closing position. The U.S. dollar is expected to extend its bull run this week with a December rate rise all but certain and markets considering that there is a reasonable chance that rates will go up faster than expected in 2017. The Fed is anticipated to head off the risk of inflation rising more quickly than desirable if Trump follows through on his proposed government spending plans.

Over the weekend Angela Merkel announced her intention to run for a 4th term as German Chancellor in next year’s election. Her controversial ‘open doors’ refugee policy has seen her popularity take a hit over 2016.
Other news this morning is the announcement from Deutsche Bank that a unanimous vote means that Paul Achleitner will continue to lead the bank’s Supervisory Board for a second term. An internal investigation on the role played by Achleitner in dealing with the Libor manipulated rates scandal has concluded favourably for Achleitner and he retains the support of the bank’s biggest shareholders.

In early trading today Henkel is the biggest faller, down 1.65%. The company has promised to invest $3 billion over the next 4 years to drive growth, focusing on its leading brands and ecommerce business. Personal-care products manufacturer Beiersdorf is down 0.9%. Several analysts reiterated ‘sell’ ratings on the company towards the end of last week. Health care products producer Fresenius is the other big loser so far with a 1% fall.
Gainers are BMW adding to Friday’s 0.88% gain with another 0.77% so far today with fellow car manufacturer Daimler also up 0.72%. Deutsche Bank and Infineon Technologies have also both had strong starts to the day with 0.4% and 0.66% gains respectively.

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