DAX, FTSE 100 Forecast: 2 Trades to Watch

The DAX hit record highs as investors rotate out of US tech stocks into European cyclicals and industrials, drawn by better valuations. The FTSE 100 broke above a symmetrical triangle pattern, with M&A activity providing fresh momentum. EasyJet faces a takeover bid from Castlelake, while ITV sold its media business to Sky.

The shift comes as traders question whether the AI-driven rally that propelled US tech can sustain current levels. European equities are attracting capital as a value play, with both German industrials and UK cyclicals benefiting from the repricing. The DAX's industrial and cyclical exposure positions it to capture flows from investors seeking alternatives to stretched US tech valuations.

FTSE 100 deal activity signals renewed corporate confidence in the UK market. The EasyJet-Castlelake proposal and the ITV-Sky transaction represent concrete catalysts beyond broader market rotation themes. Both indices show technical and fundamental tailwinds converging.