Daily market commentary: The dominating sentiment in the oil market is bearish

European Shares

Stocks edged higher in Europe on Wednesday, extending gains registered by Asian benchmarks overnight, as bullish sentiment stays alive ahead of key macro data.

Consumer cyclicals, real estate and energy shares led the way following the opening bell, while industrials and utilities registered slight losses on the old continent, as market sentiment remains broadly resilient.

The prospect of a less cloudy economic outlook in both Europe and the US after recession risks in both regions eased back, combined with the reopening of the Chinese economy, is providing strong support towards risk appetite from investors. The lack of clear hints from Fed Chairman Jerome Powell yesterday also contributed to keeping the bullish trading stance alive, and most traders will now look towards tomorrow’s US inflation print for further clues.

The DAX-40 index still trades above the 14,800.0pts level following a technical pull-back on its last top after yesterday’s bullish trading session. The next short- to mid-term target can be found around 15,115.0pts (50% Fibonacci extension) while a break-out of the 14,800.0pts support would invalidate the current bullish trend and could drive prices back towards 14,670.0pts.

Pierre Veyret– Technical analyst, ActivTrades 

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