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DAX declines as “the five wise men” cut growth forecasts

FXStreet (Mumbai) - The German blue-chip index Dax declined as the downward revision of the German growth forecast by the government panel of economic advisors overshadowed the official third-quarter German and Eurozone GDP data.

The Dax traded 0.31% lower at 9219.30, compared to the previous session’s close of 9248.50. The index breadth is negative with an advance decline ratio of 13:17. The index is being pushed lower by losses in Utilities, Food and Beverage and Chemicals sector stocks. Meanwhile, Telecom sector and Basic resource sector gained strength.

Moreover, the stock prices declined despite Germany narrowly avoiding a recession in the third-quarter, while the Eurozone economy growing more than the market expectations. The downward pressures came from the German government panel of economic advisors, called “the five wise men”, who cut cut German growth forecast this autumn to 1.2 percent from 1.9 percent citing “geopolitical tension” and “unfavorable conditions” as key reasons for weak growth.

DAX Technical Levels

The index has an immediate support at 9189, under which prices can fall to 9172 levels. Meanwhile, resistance is seen at 9228 and 9260 levels.

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