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DE30: Cautious steps at the opening in Europe

Summary:

  • Cautious start seen in the European markets across the board
  • DAX (DE30 on xStation5 platform) has challenged a further move higher
  • Banks across Florida have started reopening corporate offices after Irma

The Asian session proved to be quite equivocal. On the one side, the NIKKEI (JAP225) managed to close up 0.45%, on the other one the Hang Seng (HKComp) gave back some of its valuation once again. Even as Wall Street closed higher, investors across Europe seem to be more careful. On top of that, a technical view of the DE30 might warrant more caution as well.

link do file download linkThe DE30 has had an impressive beginning to the week but has showed first signs of fatigue of late. Source: xStation5

Looking at the chart above one could notice that bulls could struggle to pursue further gains. Namely, the price has drawn a candlestick resembling a shooting star at a daily time frame which could suggest more caution in upcoming hours. What’s more, when we have a look at a lower interval (H4) an evening star candlestick could be spotted. Thus, until buyers are able to break that level, declines could be on the cards. This is especially true when we take into account an abrupt rise seen this week.

Having assumed a possible reversal on the DE30, we cannot rule out a move towards 12320 points where a more notable support is placed. That would imply 180 points of a decline more or less. On top of that, the euro looks as if it has regained some of its appeal and is being traded just under 1.20 against the greenback which may be a little drag on the German index.

link do file download linkNeither stock listed on the DE30 has differentiated thus far amid a cautious start in Europe. Source: Bloomberg

At first, let’s sum up the Asian session which was rather benign. As we mentioned earlier, the Japanese NIKKEI (JAP225) was the best index across major ones gaining 0.45%. Moreover, the Shanghai Composite (CHNComp) added 0.15%, the Hang Seng (HKComp) edged down 0.5% while the S&P/ASX200 (AUS200) slid a mere 0.05%.

In Europe, the main indices are trading slightly lower except for the FTSE100 (UK100) which is already down 0.8% as a fourth round of UK-EU negotiations has been pushed one week forward to September 25. Elsewhere, the CAC40 (FRA40) is edging down 0.15%, the EuroStoxx50 (EU50) is losing alike. The DE30 is trading lower almost 0.2%.

Company news

Bayer (BAY.DE) is losing momentum in early trading after the report that the company sold a part of its stake in Covestro (a leading supplier of high-tech polymers) and thereby reduced its stake from 40.9% to 31.5%. Moreover, there is guesswork the Bayer’s stake might be dialed back below 25% till the end of the year.

In terms of banks’ shares, it’s worth mentioning that those have already started reopening their corporate offices in Hurricane Irma’s path. This story could be supportive for Deutsche Bank (DBK.DE) among others. Nevertheless, the stock is trading a bit beneath its yesterday’s close.

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