DAX slightly higher after a long weekend
European stocks posted modest gains at the open of trading Tuesday as investors returned from a May holiday weekend to stronger U.S. tech sector earnings and improving geopolitical sentiment.
Europe’s oil and gas sector was the best performing in early morning deals on earnings news. BP moved towards the top of the index after its profits almost tripled in the first quarter when compared to the year previous. Its shares were 2.4 percent higher on Tuesday morning. While the company isn’t listed in Germany, its results supported the sentiment.
Manufacturing sector was one of the strongest in the DAX index. source: Bloomberg
The biggest focus, however, will be on the political events in the upcoming days, with the second round of the French elections due Sunday. The two political rivals in France’s presidential race exchanged criticisms at the start of the final week of campaigning on Monday. Far-right candidate Marine Le Pen attacked pro-EU centrist Emmanuel Macron as a “candidate of continuity”, whereas the latter insisted he would fight “until the last second” to defeat the leader of the National Front.
In the meantime, U.S. President Donald Trump said he would be honored to meet North Korea leader Kim Jong-un in an interview with Bloomberg News on Monday. However, the White House suggested many conditions would need to be cleared in order for the two premiers to schedule a meeting. Meanwhile, U.S. equities closed mostly higher Monday, shaking off comments from Trump who spoke about breaking up big banks.
On the data front, the final PMI for Germany came in line with expectations. German Manufacturing expanded in a faster pace in April, which bodes well for the economic growth in the second quarter of the year.
The DAX consolidates close to multi-year highs, but remains within the upward channel. It seems that bulls are in control right now.