- All major indices in Europe have opened firmer on Tuesday
- German DAX (DE30 on xStation5) breaches a notable resistance line
- German banks are leading the gains within the DE30
After quite the upbeat session seen across Asia, the European indices have started the day higher being still hastened by receding risks related to the hurricane Irma. On top of that, rising US yields are propping up the US futures which are pointing to a sturdy opening. On the other hand, stock investors might be fond of the subdued performance of the euro which is gaining just slightly in early trading.
A quick look at the German DE30 appears to confirm our view which we’ve presented at the beginning of this week. Namely, the German index is keeping on increasing and is just shy of a projected gain stemming from a range of a broken descending channel. On the surface, bulls could pursue higher levels, albeit a noteworthy obstacle emerges in the vicinity of 12530 points. Let us point out that level has been tested several times over the course of recent months (from both sides).
Having said that, if buyers are sufficiently determined to break that level and stay above it, it might be a sign of a continuation of the ongoing trend. Moreover, once a pullback occurs, it might be contained at around a 50% retracement of a leg lower which has taken place since mid-year. If so, it could prove to be a compelling buying opportunity.
At first, let’s sum up the Asian session which brought increases across the board. The NIKKEI (JAP225) turned out to be the most standout index a second session on the trot adding as much as 1.2%. Elsewhere, the Australian S&P/ASX 200 (AUS200) managed to gain 0.6% (despite fairly equivocal NAB releases published overnight), while the Chinese equity markets ended just barely above Monday’s close. The Hang Seng offshore Chinese index (HKComp) picked up 0.15% whereas the Shanghai Composite (CHNComp) advanced 0.1%.
In Europe, we’ve experienced upbeat performance across the board thus far. The German DE30 is the best performer edging up 0.4%. Furthermore, the CAC40 (FRA40) along with the EuroStoxx50 (EU50) are going up 0.3% while the British FTSE100 (UK100) is trailing slightly behind and rising just 0.15%. Let us recall that a second reading of the Brexit bill was passed overnight which essentially could be the stock market-positive news.
As we pointed earlier, the German lenders are among top performers within the DE30. Nevertheless, there were no stories of note in case of Commerzbank (CBK.DE). In turn, Deutsche Bank (DBK.DE) is gaining after analysts of Bruyette&Woods maintained their recommendation on the bank at market perform. The target price placed at 15 EUR is unchanged. Let us indicate that the spot price is just under 14 EUR.
The German air carrier Lufthansa (LHA.DE) is on the rise as well following the report from Ryanair which is going to base 3 more aircraft in Frankfurt for total of 10. Moreover, the Munich airport reported that cargo volumes increased 7.7% yoy in August.
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