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European stock market indices trade higher but DAX lags
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DE30 failed to break above the resistance zone at 13150 pts
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Bayer (BAYN.DE) signs 6-year deal with Capgemini
Majority of the European benchmarks trade higher on Thursday as investors continue to benefit from upbeat trade comments made yesterday. However, some weakness can be spotted on the UK and German stock markets as FTSE and DAX struggle in the vicinity of yesterday’s closing prices.
The German factory orders data October was released at 7:00 pm GMT. Reading turned out to be a disappointment as consensus called for a 0.4% MoM increase while the actual data showed a decline of 0.4% MoM. Decline can be ascribed to a 3.2% MoM drop in domestic orders as foreign orders grew 1.5% MoM. The biggest decline was spotted in the capital goods category.
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Source: xStation5
DE30 failed to break above the resistance zone at 13150 pts yesterday. The index stands in contrast to other European indices today as it trades slightly lower. A short-term support can be spotted at the 13100 pts handle. This level was tested twice today and each tested was followed by a quick move higher. Having said that, one cannot rule out the possibility of another attempt of breaking above the aforementioned resistance zone. In case of a break above the 13150 pts zone, bulls may aim for a test of the 200-hour moving average (purple line, 13185 pts area).
DAX members at 9:45 am GMT. Source: Bloomberg
Deutsche Telekom (DTE.DE) decided to halt purchases of the 5G equipment due to political uncertainty over Huawei Technologies. The decision shows that ongoing spat over whether to allow Huawei devices in Europe or not, is cooling network’s roll out on the Old Continent. Deutsche Telekom planned to instal 1.5 thousand 5G antennas in Germany by the end of 2020 but now it is unsure whether it will manage to do it with current equipment backlog.
Bayer (BAYN.DE) signed a 6-year deal with Capgemini. Under the expanded partnership, Capgemini will provide IT services to the German firm and will accelerate digitalization of the company. The deal is said to be worth over €1 billion.
Analysts’ actions
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Daimler (DAI.DE) cut to “sell” from “hold” at Bankhaus Lampe. Price target set at €44
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BMW (BMW.DE) raised to “hold” from “sell” at Bankhaus Lampe. Price target set at €77
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Siemens (SIE.DE) cut to “equal-weight” from “overweight” at Morgan Stanley. Price target set at €122
Share price of Daimler (DAI.DE) is testing the support zone ranging around the 23.6% Fibo level of the downward move started at the beginning of 2018. A point to note is that the 200-session moving average (purple line) can be found in the same place. Having said that, bears may have a tough job breaking below the €49.50 handle. Source: xStation5
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