The DAX index has posted sharp losses in the Wednesday session. Currently, the DAX is at 12,939.50, down 0.84% on the day. On the release front, German and European indicators were positive, but this was not enough to keep the DAX from moving into red territory. German Factory Orders gained 0.5%, above the estimate of -0.2%. There was more positive news, as Eurozone Retail PMI improved to 52.4 points in November, its highest level since June. On Thursday, German releases Industrial Production and ECB President Mario Draghi holds a press conference hosted by the ECB.
There is little to cheer about on the Frankfurt exchange on Wednesday, as almost all of the DAX listings are in red territory. Financial stocks are down sharply, with Commerzbank and Deutsche Bank posting losses of 1.82% and 1.60% respectively. Technology stocks are also down, led by Infineon Technologies, which has declined 1.28% on the day.
The eurozone has enjoyed a strong 2017, marked by steady growth and lower unemployment. The ECB has projected GDP of 2.2% in 2017 and inflation of 1.2%. Things are so good that the ECB finally acted and tapered its asset purchase program, although it did extend the program until September 2018. Still, the cautious ECB said on Wednesday that it was concerned about increased risk-taking behavior in global financial markets” as this could lead to sharp asset price corrections. The ECB is also keeping its eye on political uncertainty in Europe, notably the deadlocked Brexit negotiations and the political vacuum in Germany. In the meantime, European stock markets remain at high levels and the euro is enjoying the view from the 1.18 level.
