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European stock indices rally
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DE30 breaks above resistance at 13,330 pts
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Continental warns of Russia-Ukraine war impact on business
European stock markets are trading higher on Wednesday, snapping a losing strike. Markets seem to be tired of war and are overreacting to positive headlines, like yesterday's comments from Zelensky saying that Ukraine no longer seeks to join NATO. On the other hand, the US and UK announced bans on Russian oil yesterday and Russia vowed a "sensitive and precise retaliation" that will include a ban on some commodity exports. List of commodities banned from exports is expected to be announced within days.
Source: xStation5
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Open account Try demo Download mobile app Download mobile appDE30 rallied today as "war trades" started to fade. Indices and EUR gain while oil pulls back. DE30 is trading around 5% above yesterday's close of the cash trading session. This shows that moods have improved significantly. However, the technical situation on DE30 also supports the bullish scenario. Taking a look at the index at H4 interval, we can see that price broke above the upper limit of the local market geometry at 13,330 pts. According to the Overbalance methodology, the trend has reversed upward following such a break and continuation of the upward move could be on the cards. The nearest resistance to watch can be found in the 13,780 pts area.
Company News
Continental (CON.DE) expects 2022 adjusted EBIT margin to reach 5.5-6.5% (exp. 7.1%) while sales are expected to reach €38-40 billion. Company said that the geopolitical situation in the Eastern Europe has a big impact on its operations and warned that should it worsen further, sales and earnings may be lower than forecasts. Nevertheless, Continental said that it expects business to pick-up after a slow start to the year.
Deutsche Post (DPW.DE) released Q4 results today. Company reported a 13% YoY jump in EBIT, to €2.21 billion (exp. €2.27 billion), and a 22% YoY jump in Q4 revenue, to €23.38 billion (exp. €21.61 billion). Express segment was the biggest contributor to earnings accounting for 50.2% of EBIT and 29.3% of sales. Deutsche Post announced that it intends to pay €1.80 dividend per share from 2021 profit, up from €1.30 per share in 2020.
Airbus (AIR.DE) received an order for 10 helicopters from the US Air Ambulance Service. Based on available prices, the order for ten H135 helicopters can be worth $50-60 million.
Analysts' actions
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Wacker Chemie (WCH.DE) downgraded to "hold" at HSBC. Price target set at €140.00
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Nemetschek (NEM.DE) rated "neutral" at Exane. Price target set at €80.00
Shares of Deutsche Post (DPW.DE) rallied after the company announced an almost 38.5% increase in dividend per share. Stock leaped higher today in an attempt to distance away from a support zone marked with 50% retracement of post-pandemic upward move (€40.10 area). A 38.2% retracement in the €45.15 area may offer some resistance. Source: xStation5
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