Summary:

• European markets trade higher despite weaker Asian session
• The DE30 could bounce from current levels
• Henkel AG and Infineon were in the spotlight

The European equity markets have kicked off the day with gains that have their roots in yesterday’s rise on the energy markets. Despite undoubtedly weaker Asian session, during which only the Antipodean stock market has managed to stay above the flat line, European bourses trade higher in early Tuesday deals.

The DE30 forms a reverse formation deeper into the demand zone suggesting a stronger move to the upside. Long wicks created in recent days could mean that there is a substantial amount of buyers at this level. Source: xStation5

Taking a look at a technical analysis one could assume that the price could rebound above 12500 level which might be additionally underpinned by a supply zone between 12562 and 12673. On the other hand, a breakout below a 12103 level could accelerate losses but for now, this scenario is less likely. 

The DE30 has almost all of its components trading in the positive territory as only 3 stocks are below the flat line. Source: Bloomberg

In Asia, the NIKKEI (JAP225) slipped 0.10 percent, the Shanghai Composite (CHNComp) lost 0.21 percent, the Hang Seng Composite (HKComp) went down 0.35 percent whilst the Australian S&P/ASX200 increased 0.68 percent on stronger Australian dolar.

However, moods in Europe are excellent so far with almost all bourses in the old continent being in the green. The DE30 is gaining 0.54 percent, the CAC40 (FRA40) is inching higher by 0.69 percent, the EuroStoxx50 (EU50) is going up 0.70 percent, whereas the FTSE100 (UK100) is adding the most, with a 0.77 percent.

On the data front,  German business sentiment surged to a record high in July, and the Ifo institute on Tuesday described the mood among German companies as “euphoric.” The Ifo’s business climate index rose to 116.0 points, comfortably beating June’s record of 115.2 points and economists’ forecast of 114.9 points. German companies were more upbeat about their current business situation and their six-month outlook, which should also support the DAX.

Company news

One of the most interesting stocks today might be a Henkel AG as the company has received a ’buy’ recommendation from Jefferies and is trading 1.06 percent higher today. Analysts predicts that Henkel will trade at 150 euros within a year, implying a 27 percent increase from the current price. Also, the new target is 16 percent above the consensus average of 129.14 euros. Moreover, the company had 12 ’buy’ recommendations, 15 ’holds’ and 5 ’sells’ before today.

Another interesting stock today is Infineon, trading 1.09 percent higher today as consensus projections of the company’s fiscal 3Q sales is at 1.83 billion dollars as its strong position in power and auto chips is likely to keep propelling sales over the next year. Also, steady margin expansion at auto segment bodes well for the company’s future.