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DE30: Stock markets open lower after feeble Asian session

Summary:

  • European stock markets have gotten underway lower following quite a weak session in Asia
  • DAX (DE30 on xStation5) rejects a breakout of a key resistance level
  • Daimler (DAI.DE) increases as Goldman Sachs upgrades the stock to buy

The European equity markets have kicked off moderately lower following fairly a lackluster Asian session. A bit more cautious approach could stem from the fact that the ECB’s meeting will take place tomorrow and with some doubts surrounding a decision regarding a reduction of monthly assets purchases there is a risk of a more stormy session for the euro and the stock markets alike.

link do file download linkThe DE30 has rejected a breakout of a pivotal resistance line but it looks as if it would be poised to do so yet again. Source: xStation5

Looking at a technical view on the German index one could notice that the price was unable to break through 12165 points during the yesterday’s session. As a result, we saw a reversal toward 12075 points. Nevertheless, it looks as if buyers would have a desire to try to break it once again. However, the stronger euro which can be spotted in the FX market at the beginning of the European session, could make a rebound harder to achieve. Either way, a close on a daily time frame above 12165 points could be a turning point in the medium-term.

Nonetheless, as usual it needs to consider a second possible scenario. So, if the price closes the day below 12075 points, it could encourage sellers to enter the marker anew. If so, a move towards recent lows could be on the cards. Having said that, it’s likely that quite a narrow range (within the price is moving right now) won’t be broken till tomorrow’s ECB decision.

link do file download linkDaimler (DAI.DE) is the most standout stock within the DE30, however a majority of them lose ground in early trading. Source: Bloomberg

At first, as usual let’s whip through the Asian stock markets which marked quite a miserable session. The Hang Seng (HKComp) turned out to be the major loser as it trimmed its value by 0.6%. Besides, the Australian S&P/ASX 200 (AUS200) edged down 0.3% which could be a ramification of slower than expected GDP growth in Q2. The NIKKEI (JAP225) slipped 0.15%, while Shanghai Composite (CHNComp) managed to close unchanged.

Looking at the European indices, some continence can be noticed. The DE30 is trading lower 0.1%, the CAC40 (FRA40) is moving down 0.15%, the EuroStoxx50 (EU50) is sliding 0.2% while the British FTSE100 (UK100) is edging down 0.35%. It’s interesting that the Italian FTSE MIB (ITA40) is gaining a bit more than 0.2% regardless of a sub-par reading of retail sales.

Company news

The major mover within the DE30 for certain is Daimler (DAI.DE) which has been buoyed by a recommendation from Goldman Sachs. The famous investment bank upgraded the stock to buy from neutral with a new price target revised slightly up to 81 EUR from 80 EUR. By the way, it implies as much as 30% of the upside compared to the last close. However, it needs to know that the GS’s call could be too complacent when we weigh it against the consensus average at 70.21 EUR.

On the other hand, E.ON (EOAN.DE) is the most laggard losing more than 1%. As for the latest news from the company we got one pointing that the firm has started constructing its Texas Waves power storage project in the US. The storage facility will be equipped with the 20 megawatt capacity.

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