Summary:
- European stock markets have begun the day flat, IBEX has soared though
- DAX (DE30 on xStation5) holds onto its uptrend, a bullish sequence could bode well going forward
- Bayer (BAY.DE) drops following an unfriendly recommendation
Stock markets across the old continent have kicked off the day with modest gains or losses except for the Spanish IBEX (SPA35) which has surged after the opening close to 1% after an encouraging statement delivered by Catalan President Carles Puidgemont (we provide the in-depth analysis on this topic here). Looking forward, the minutes from the latest ECB’s meeting could shake the euro and equity markets alike.
The DE30 has failed to maintain yesterday’s gains, an upward swing appears to be still the base scenario though. Source: xStation5
The German index is continuing to rise and even as it has missed an opportunity to close at a record high, bulls could aim for it once again. At first let’s have a look at a daily interval where the price drew ambiguous candlestick on Wednesday. On the one side, buyers were unable to break 13000 points durably, on the other one quite a long shadow could provide a signal that strength of bears could be questionable.
Otherwise, a bullish sequence has been retained at a H1 time frame and for all a potential double top formation, bulls seem to put a lid on the market. That said, until a demand side concedes defeat (a breakout of a short-term uptrend line), investors could pursue making a new all-time high peak.
German stocks have been divided on half in terms of performance while Bayer (BAY.DE) is among the largest laggards. Source: Bloomberg
The Asian session was quite green with the Hang Seng (HKComp) being the most standout index as it gained 0.8%. Besides, both the NIKKEI (JAP225) and the Australian S&P/ASX 200 (AUS200) closed the day flat. Notice, the latter was unimpressed with the grim retail sales report from the domestic economy.
The performance of the European equity markets has been fairly listless so far and swings have ranged from +0.15% to -0.1% barring the Spanish index which is already up 0.75%. Keep in mind that the account from the ECB’s meeting in September might affect European equity markets as the central bank is gearing up for a major shift of its policy, for that reason investors are bound to zoom in on that theme later in the day.
Company news
Bayer (BAY.DE) is losing momentum in early trading as the stock has been downgraded to hold from buy by Warburg Investment Research with a price target at 121 EUR. Notice that investors who followed the group’s call would have booked a 34% return in the past year.