Dax 30 and Stock Markets Reverse Higher After the Crash
Dax 30 and stock indices had another terrible day today, but they found some support at last and have managed a decent bounce
Dax 30 and stock indices had another terrible day today, but they found some support at last and have managed a decent bounce. Risk trades had a devastating European session marked by a complete flight to safety across all markets. This shift soon led to a sell-everything mode as precious metal prices dropped. Silver plummeted by about 7% to $26.50, while gold lost more than 3%, nearing $2,364. The price of copper futures also fell below $4. USD/JPY dropped to 141.60, more than 20 cents down from the highs a month ago, as the carry trade unwound, causing the Nikkei to suffer its worst decline since 1987.
DAX 30 Chart Daily – Three Massive Bearish Candlesticks
European stock indices also had a terrible day, losing around 2.5% on average. Stocks faced selling pressure during the transition from Asia to Europe, but eventually found some support, clawing back some losses yet still ending 2% down for the day. The S&P 500 futures index fell around 5%, while Nasdaq futures fell even more, with tech shares suffering the most from the losses, though conditions improved somewhat later.
European Stock Indices Closing Changes
- Stoxx 600: Closed down 2.2%, reflecting widespread declines across European markets.
- German DAX: Dropped by 2.0%, driven by significant losses in industrial and financial sectors.
- UK FTSE 100: Fell 2.2%, with energy and consumer goods stocks leading the downturn.
- French CAC: Decreased by 1.6%, somewhat cushioned by better-than-expected corporate earnings from a few large firms.
- Italy MIB: Declined 2.4%, the most significant drop among major European indices, heavily influenced by banking sector woes.
- Spain IBEX: Lost 2.3%, pressured by a combination of political uncertainties and broader market sell-off.
Market Reversal and Bond Yields
Bonds emerged as the only viable alternative, with 10-year Treasury yields continued to decline as the yield curve inversion nears its conclusion. The Swiss franc was another major winner in foreign exchange, with USD/CHF dropping around 1.5% to 0.8432. The dollar remained unchanged against the Australian and New Zealand dollars after a 150-pip crash during the Asian session and subsequent reversal. However, it remained down against the euro, yen, and franc. AUD/USD fell around 2% to 0.6350 but has since rebounded, trading around 0.65.
German Index DAX 30 Chart
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