Frankfurt Stock Outlook: Dax expected to be stronger at the start of a 'crucial week'

FRANKFURT (dpa-AFX) - The DAX is poised for gains on Monday. However, due to a lack of clear stimulus from overseas markets, buying appetite is likely to remain limited. Key economic data is also still lacking at the start of the week.

An hour before trading opened, the X-DAX, the over-the-counter indicator for Germany's leading index, signaled a 0.3 percent gain to 23,772 points. This would put it roughly in the middle of its September range, which has so far ranged from just below 23,500 to just above the 24,000 point mark. Its Eurozone counterpart, the EuroStoxx 50, is expected to be similarly moderately higher. Both indices ended last week with little movement.

Commerzbank, however, sees the stock markets facing a decisive week. First, US retail sales will be in focus on Tuesday, before all eyes turn to the US interest rate decision on Wednesday evening. Investors firmly believe that the Fed will cut its key interest rate. Some even consider a significant rate hike of 0.5 percentage points possible.

According to chart expert Christoph Geyer, the DAX is holding up quite well so far, given the difficult month, as most of the price declines and crashes occur in September. "However, this stable position so far does not protect against the possibility of things getting uncomfortable again before the year-end rally begins in October," Geyer wrote in a market commentary.

On the corporate side, Rheinmetall shares should be worth a look on Monday. The defense company agreed with Bremen-based shipyard group Lürssen to purchase its military division NVL. With the acquisition of the shipbuilder, Rheinmetall aims to broaden its position and develop the naval sector as an additional business area. However, the transaction is no longer a surprise, given that it had been speculated about for some time. Since both parties have agreed not to disclose the purchase price, the financial impact of the deal for Rheinmetall is also difficult to estimate, according to traders.

Meanwhile, media reports that aircraft manufacturer Airbus could reach an agreement for a European satellite alliance with defense companies Leonardo and Thales as early as 2025 were described by stock market participants as a repetition of previous reports. Furthermore, Canadian bank RBC raised its price target for Airbus from €200 to €220 following discussions with management, putting it slightly above the current price./gl/stk

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