Summary:
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German government said to make a move in Deutsche Bank-Commerzbank merger by May
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Downward momentum on DAX (DE30) eases
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Wirecard (WDI.DE) tries to recover after yesterday’s drop
Stock from the Old Continent are trading mixed after the first two hours of the European session. Reasonable gains can be spotted on the Italian stock market while equities from Spain and Belgium underperform the most. Chemical sector leads gains while builders and telecoms can be found among the biggest laggards.
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DE30 continues to trade below the recently broken upward sloping trendline. The German benchmark reached the support zone ranging 10980-11060 pts. So far it looks like bulls are going to defend this technical hurdle as the downward momentum eased. Nevertheless, a break lower would pave a wave towards the 10840 pts handle. Source: xStation5
Olaf Scholz, the German Finance Minister, urged companies from the domestic financial sector to prepare for no-deal Brexit. Scholz said that government and regulator is working with the German financial sector to ensure that even in the case of no-deal Brexit no individual company as well as the financial system as a whole would be put in danger under circumstance of the United Kingdom crashing out of the European Union without an agreement in place. Finance Minister added that the German government is likely to pass a law later this month that would give BaFin, the German financial watchdog, additional powers in an event of major financial distress on the markets. Scholz’s remarks are another ones in a series of speeches from the European politicians aimed at warning business about the need to prepare for the worst.
Meanwhile, the WirtschaftsWoche news magazine reported that the German government is likely to push for the Deutsche Bank-Commerzbank merger by May. Among reasons behind such hastiness the report names desire to conclude merger prior to the European elections. This is because potential shift in power after the elections may make receiving EU approval much harder.
Major European stock market indices after the first two hours of trade:
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DAX (DE30): +0.05%
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FTSE 100 (UK100): +0.18%
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CAC40 (FRA40): +0.13%
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IBEX (SPA35): -0.36%
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FTSE MIB (ITA40): +0.30%
Wirecard (WDI.DE) tries to pare yesterday’s drop today. The company took a hit after the release of another Financial Times report. Source: Bloomberg
Company News
Wirecard (WDI.DE) took another hit yesterday after Financial Times published another report on company. FT claims that at least two senior executives could have known about book-padding patterns in the Wirecard’s Asian business. Newspaper said that it got information from the preliminary report of the law firm that is investigating the case. The company immediately released a statement saying that nothing of about the report is true.
Daimler (DAI.DE) is underperforming today. The German carmaker was downgraded at Kepler Cheuvreux from “buy” to “hold”. The one-year price target was lowered from €55 to €53.
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