Germany's DAX 30 Index: Bad start to new week for German stocks – Wirecard takes off

• DAX closes with a slight loss at the beginning of the week
• Wirecard raises sharply following restructuring of the Management Board
• Investors fear second wave of corona infections in Germany

After the gains on Friday, the mood on the German stock market deteriorated at the beginning of the week. One trader said that fears of a second wave of infection in Germany have increased. This had led to profit-taking at the psychologically significant 11,000 point mark on the DAX, he added. Uncertainty was also caused by Chinese advisors calling for talks about a new trading deal with the USA.

The German stock index DAX closed with a minus of 0.74% or 79 points at 10,824.99 points. The daily high was 10,986.22 points and the low was 10,740.82 points. The stock barometer from Germany was supported by the 10-day moving average at 10,771.62 points. Since the DAX is still able to stay above its 50-day moving average, the outlook remains positive. 

The MDAX, which includes medium-sized German companies, fell by 0.41% and the SDAX, which includes small German companies, lost 0.39%. In contrast to the overall trend, the technology-oriented TecDAX gained 0.15%.

Wirecard posts strong gains following restructuring of the Management Board

Among the individual companies, the focus today was once again on the Wirecard share. The stock of the German payment services provider rose by 8.62 percent, making it the top performer in the DAX. The reason for the price jump was the restructuring of the Management Board announced on Friday after the close of trading in response to criticism from major investors such as Deka. This was well received by the analysts. As a consequence, Baader Bank left Wirecard's rating at Buy with a target price of EUR 240. He welcomed the measures announced by the payment-processing company to restructure the Management Board and improve organizational processes, analyst Knut Woller wrote in a study available on Monday, as reported by dpa-AFX.

Also in demand were the stocks of Fresenius Medical Care (+1.94%), Deutsche Börse (+0.91%) and Fresenius (+0.87%). Underperforming stocks were Heidelbergcement (-4.59%), Infineon (-3.43%) and Covestro (2.68%). 

Investors fear second wave of corona infections in Germany

On Monday, the renewed rise in the so-called reproduction rate caused uncertainty on the trading floor. The Robert Koch Institute (RKI), which is responsible for the coordination of the coronavirus in Germany, reported on Monday for the second day in a row a reproduction rate of more than 1. Currently, the rate sits at 1.13. In purely mathematical terms, an active corona infected person would infect more than one person. This is fuelling fears of another exponential development of the pandemic in Europe's most important economy.

According to the Johns Hopkins tracker, there are 171,999 confirmed corona virus cases in Germany to date, 7,569 people have died of the novel virus so far, while more than 145,000 have already recovered from it.

Germany began reopening its economy last week. This tends to increase the danger of a second wave of infection, which could put a short-term damper on stock prices. 

Chinese advisors call for new trade agreement with the US

Investor sentiment was also depressed by an article in the Global Times, according to which some Chinese advisors are calling for a renegotiation of the trade agreement with the USA. 

Advisors familiar with the talks may have suggested that Chinese representatives revive the possibility of invalidating the trade deal. The background is that they want to take advantage of the weakened state of the US economy to make the deal more in favour of the Chinese.

Last week, US President Donald Trump said he was "very torn" about whether to end the Phase 1 trade agreement with China, despite high-level trade officials from both countries promising to work on implementing the trade agreement. 

Trump has recently voiced frequent criticism of China's handling of the coronavirus outbreak, which spread from Wuhan around the world and cost millions of Americans their jobs.

German DAX 30 key technical levels

Despite today's setback, the chart outlook remains bullish. The DAX can still hold above its most important moving averages. Meanwhile, the technical indicators are mixed: the MACD continues to show a buy signal, while the RSI is neutral. As a cautionary note, the bearish trading volumes continue to be a warning. 

Supports are at 10,618.69 (20-day moving average) and 10,771.47 (10-moving average). Resistances are at 10,842 (S1), 10,880 (pivot) and 11,041.42 (R3).