Summary:

  • After the stellar US session, European stock markets kick off higher but reverse thereafter
  • German DAX (DE30 on xStation5) faces a critical resistance line
  • ProSiebenSat.1 (PSM.DE) declines the most within the German index

After a rosy session in the US, European investors have begun the day with upbeat spirits which have been buoyed by better than envisaged PMI releases. In effect, the euro has jumped but the DE30 has remained in demand as well even as the stronger currency usually acts not in favor of companies’ profitability (upward momentum begins petering out though at the time of writing). Let’s have a look at the chart beneath.

link do file download linkThe DE30 has been rebounding recently but has already faced a crucial resistance zone which could put a brake on further gains. Source: xStation5

Technically, the index has already approached a crucial resistance area which could stop buyers, at least for a while. Otherwise, the higher euro is, the more careful investors could become as the stronger currency eats into companies’ profitability. Thus, if a morning surge seen in the euro turns out to be sustainable, it could harness stock investors. As a result, the DE30 could move down towards 12080 once again.

On the other hand, once a demand side is able to break out a short-term descending trend line, it could be a first omen of a more extended move to the upside. That said, a subsequent resistance area (a red rectangle) has to be broken as well in order to keep bullish momentum. Under that scenario, an increase could hasten as numerous stop loss orders could have been put just above 12320 points.

link do file download linkStocks’ performance within the DE30 remains mixed with Deutsche Bank being the best performer in the morning. Source: Bloomberg

Looking back to the Asian session the Hang Seng (HKComp) was by far the best index compared with its peers, yet again in a row, adding as much as 1.9%. Otherwise, the NIKKEI (JAP225) gained 0.26% while the Shanghai Composite (CHNComp) slipped almost 0.1% and the S&P/ASX 200 (AUS200) moved down more than 0.2%.

In turn, when it comes to the European stock markets there has been quite volatile session so far. After a rosy beginning of the day, equity investors have decided to pull out some of their money, arguably on the back of a rise seen on the euro. Therefore, all major indices have turned red with the FTSE MIB (ITA40) losing the most (0.25). Elsewhere, the DE30 is going down 0.1%, the EuroStoxx50 (EU50) is sliding 0.1% too, the CAC40 (FRA40) is treading water whilst the FTSE100 (UK100) is adding a mere 0.09%.

Company news

ProSiebenSat.1 (PSM.DE) is right now the worst performing stock within the DE30 after the ad giant WPP cut its full-year revenue forecast amid lower outlays by customers, in particular consumer-goods manufacturers. The company’s share are declining c.a. 2% along with other broadcasters.

E.ON (EOAN.DE) began the day higher following a recommendation from RBC where the bank chose to upgrade the stock to outperform rising the price target from 8 EUR to 10.75 EUR. However, the stock has lost some of ground since then. As a result, it’s trading just little changed on the day.