Although the market dipped lower in early trading, underlying market confidence held firm with optimism surrounding earnings helping to maintain solid investor buying support on dips.
Risk appetite dipped lower early in European trading on Friday with investors taking a more cautious stance following a weaker tone in Asian trading. The Nikkei declined 0.68% on the day as the dollar lost ground and Asian bourses overall were subjected to profit taking.
The financial sector remained under pressure throughout Europe and had a negative impact on the German market with Deutsche Bank and Commerzbank both declining significantly in early trading.
The Dax index did open slightly higher, but quickly lost ground and moved into negative territory with lows around 11,700.
A further flattening of the German yield curve and decline in longer-term bond yields was important in curbing support for the banking sector.
Corporate earnings continued to provide net support to the market with Allianz moving higher after the company reported increased profits and a share buyback programme.
There were no significant economic releases during the day and there was still some residual market support from a broadly dovish set of ECB minutes released on Thursday.
The index continued to find solid support on approach to 11,700 at the European open.
Although US equity futures dipped sharply ahead of the US open, there was still solid buying support on dips with losses in the S&P 500 index held to around 0.20% late in the European session.
Continued resilience in the US market provided an important cushion for the German market and the Dax moved steadily higher in the final hour of trading.
At the close, the index was down fractionally at 11,757.02, unchanged in percentage terms.
US trends will tend to dominate in the short term unless there are major developments surrounding European polices and trading conditions are likely to be subdued with a US market holiday on Monday.
German Dax 30 Index 4-hour Chart