DAX: DE40 gains almost 1% amid better sentiments in Europe 📈Rheinmetall and Sartorius gain

• Sentiment in the European stock market is improving after a strong session on Wall Street yesterday and a higher close for Asian indices
• DAX (DE40) futures trade up 0.9% and bounce from 18200 to over 18500 points
• Companies in the German defence sector gain on a 6% rally in the share price of Rheinmetall (RHM.DE); military electronics manufacturer Hensoldt (HAG.DE) also gains
• Sartorius (SRT.DE) shares record an unexpected rebound after news of the experienced CEO's resignation
• Lufthansa (LHA.DE) rebounds from historic lows after regulatory green-light to 41% stake takeover in ITA Airways
• Revision of June PMI data from Germany suggests slightly weaker result (53.1 vs. 53.5 previously) - strong services

Buyers prevail on European stock markets today, with the DAX index back above 18,500 points. June PMI revisions from the Old Continent came in slightly weaker than before; invariably, services are the biggest inflation risk. Among German companies, the standouts today were Rheinmetall, for which Morgan Stanley raised forecasts, and Sartorius, whose dynamic rally is rather puzzling and coincided with the news of the non-renewal of the contract for its acting CEO of 20 years, Dr. Kreubzerg. We are also seeing better sentiment among Volkswagen, Porsche, BMW and Mercedes shares, which have sold off in recent days. We are also seeing gains in the shares of steel maker Thysenkrupp (TKA.DE) and Detutsche Bank (DB.DE), which is gaining nearly 4%. 

Most of the DAX40 companies are up today. Sartorius, Rheinmetall, Deutsche Bank and Zalando stand out with increases. Porsche and Volkswagen are also doing better. Henkel and Beiersdorf are the weakest DAX components today. Source: Bloomberg Finance L.PDAX futures have approached 18500 points, where we have seen supply reactions several times since the last roll. Buying volume clearly prevails in today's session. Source: xStation5

News from companies

• Morgan Stanley began coverage of Rheinmetall (RHM.DE) a German defense company, with an "overweight" recommendation. The analysts assessed that the leading German arms manufacturer is "undervalued and misunderstood." Analysts believe that the stock's ongoing weakness until recently represents a potential opportunity. Rheinmetall has at least six years to renew its stock, and demand will be supported by higher defense spending. Also, Rheinmetall's business is less cyclical than it appears, and the electronics division will be a key driver of long-term growth, according to MS. Morgan Stanley has set a target price of €636, which would imply a 33% upside from yesterday's close. German defense companies Hensoldt (HDS.DE) and MTU Aero Engines (MTU.DE) are indirectly benefiting from Rheinmetall's share price increase today.

• Medical equipment manufacturer Sartorius (SRT.DE) is trading at nearly 6% growth, following news that CEO Joachim Kreuzburg, who had been in his role for 20 years, is stepping down. Kreuzburg did not renew his contract and will step down in December 2025. Investors may be hoping that the new CEO will open a 'new chapter' in the history of the company, which has wiped out more than 60% of its capitalization since joining the DAX in 2021.

• Nordex (NDX1.DE) received orders for 17 projects with a total capacity of 245 MW from France and Turkey at the end of June, but the share price is not reacting euphorically to the news, rising less than 0.8% today. France has ordered 35 Class 3 and 4 MW turbines for a total of nine projects. Turkish customers have ordered nine N163/6.X turbines and nine Class 4 and 5 MW turbines for eight projects with a total capacity of 113 MW. The orders include servicing the turbines after they are commissioned in late 2024 and in 2025.

• DEUTZ (DEZ.DE) shares are losing nearly 6%, following news that the company will offer new shares in a private placement. The company plans to increase its share capital by 10%, to 138,761,914 shares through up to 12,614,719 new shares. Shares have risen nearly 17% in the past month; the company has committed to a six-month lock-up.

• Lufthansa (LHA.DE) is rebounding from historic lows today, trading up more than 2%, after European Union regulators agreed to acquire a 41% stake in Italian airline ITA, in a deal valued at €350 million. The company sees growth potential in Italy's Fiumcino Rome airport, which will provide an important 'window' for its fleet on destinations to Africa and Latin America. The company is also in talks with EasyJet and Volatea to launch European routes on slightly more 'budget', short-haul destinations. Company will be able to take over larger part of ITA business, if financial conditions of Italian airline will improve.

• Shares of the largest, European semiconductor manufacturer ASM International NV (ASM.NL) are gaining more than 3%, following a "buy" recommendation on Stifel. Analysts see 13% upside potential, to €800 per share. The share price has more than doubled since last fall.

ASML.NL share chart (interval D1)

Source: xStation5