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Germany aims to exit coal by 2038, billions in compensations to affected parties
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DE30 eyes break to fresh 2-year high
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Bayer (BAYN.DE) gains as Roundup settlement is said to be near
Stocks in Europe opened higher on Tuesday as moods remain upbeat after a solid data pack from China. Gains can be spotted all across the Old Continent. However, the Polish WIG20 (W20) is an exception among European blue-chip indices as it trades lower following a plunge in the shares of game developer CD Projekt (CDR.PL).
Germany strikes deal with utility companies to scrap coal by 2038
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Open account Try demo Download mobile app Download mobile appGerman government brokered an agreement that will scale down to zero country’s power generation from coal by 2038. The deal includes billions of euros in compensation to utility companies and impacted regions. RWE will get as much as €2.6 billion while lignite operators in eastern part of the country will receive €1.75 billion in compensation. Government will also finance retraining for workers hit by plant closures. Some of the coal-based power plants will be transformed to gas-fired units.
Source: xStation5
DE30 continues to move higher following a break above the upper limit of the upward channel. The stock tested YTD high at 13550 pts at the beginning of the cash session but failed to hold onto these gains and erased the bounce by the end of first trading hour. However, bulls remain in the markets favour during the second hour and one cannot rule out repeated attempts of breaking above the aforementioned hurdle today. 13480 pts area is the near-term support to watch. Note that the German index is trading just 0.6% below its ATH.
DAX members at 9:40 am GMT. Source: Bloomberg
According to Dow Jones & Company, mediation talks between the Deutsche Lufthansa (LHA.DE) and a labour union UFO broke down over non-wage related issues. However, the German carrier expects negotiations to restart soon.
Bayer (BAYN.DE) opened higher today following comments from a court-appointed mediator to the Roundup case. Mediator said that he remains “cautiously optimistic” about reaching settlement in around a month. However, the number of claims is said to have risen to 75-85 thousand from 42.7 thousand at the end of Q3 2019.
According to the Reuters report, Volkswagen (VOW3.DE) plans to acquire a 20% stake in the Chinese battery producer Guoxuan High-Tech. Current market value of the stake sits at around $560 million. However, the report has not been confirmed by any of the involved companies yet.
Analyst actions
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RWE (RWE.DE) had its price target raised from €34.70 to €42 at Bankhaus Metzler. “Buy” recommendation was maintained.
Bayer (BAYN.DE) opened higher today on hints that Roundup settlement is coming soon. The German company is trading in an upward channel and has recently managed to break above the 23.6% Fibo level of the downward move started in April 2015. The nearest resistance can be found at 38.2% retracement (€87.30). Source: xStation5
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