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European stock markets add to previous gains
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DE30 paints a double top in the 12,750 pts area
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Allianz, BMW and Deutsche Post reported Q2 earnings
European stock markets are trading higher on Wednesday. DAX and CAC40 gain around 0.8% each while UK FTSE 100 adds 1%. However, sentiment may change in the afternoon when the ADP report (1:15 pm BST) is released therefore traders should watch this release closely. When it comes to individual companies, trading is dominated by earnings releases with Allianz, BMW and Deutsche Post releasing their results ahead of today's session open.
DE30 has climbed towards the 200-hour moving average today (purple line) but failed to break above it. Should the ongoing pullback deepen, investors should focus on the recent local low in 12,550 pts area. Breaking below this level would confirm a double top pattern painted in the resistance zone at 12,750 pts. Source: xStation5
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Open account Try demo Download mobile app Download mobile appAllianz (ALV.DE) reported a net profit of €1.53 billion for Q2 2020, marking a 28.6% YoY drop. Revenue declined 6.8% YoY to €30.9 billion. Assets under management increased to €2.25 trillion. Company decided not to provide an updated full-year guidance as uncertainty related to Covid-19 pandemic persists. However, executives are confident that Allianz performance in the second half of the year will be solid.
BMW (BMW.DE) reported the first quarterly loss since the Global Financial Crisis. The German carmaker had a €666 million EBIT loss in Q2 2020. Loss was bigger than expected by analysts and BMW said it was due to coronavirus related shutdowns and delays in deliveries. However, the company reported increased sales volume in China, which began to reopen earlier than the rest of the World. Company lowered the outlook for full-year EBIT margin from 2-4% to 0-3%.
Deutsche Post (DPW.DE) reported Q2 net profit of €525 million, or 14.6% YoY higher. The company reported revenue of €15.96 billion, marking a 3.1% YoY increase. EBIT increased 18.6% YoY to €912 million. Both revenue and EBIT were a bit higher than suggested by preliminary results released by the company in July. Deutsche Post decided to maintain its operating profit forecast of €3.5-3.8 billion for 2020.
Commerzbank (CBK.DE) reported Q2 net income at €220 million. However, the Bank decided to abandon its profit outlook for the year after booking up as much as €175 million charge related to Wirecard's collapse. Q2 provisions for loan losses reached €469 million, the highest since 2013. The Bank now expects full-year provisions to reach €1.3-1.5 billion, compared to previous guidance of no more than €1.4 billion. Revenue at €2.27 billion was 6.5% YoY higher and met analysts' expectations.
DAX members at 10:19 am BST. Source: Bloomberg
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