DE30 breaks above resistance of 13,680 points

• DE30 breaks above resistance of 13,680 points 

• German industrial orders data

• Updates from: Lufthansa (LHA.DE), Merck (MRK.DE) and Bayer (BAYN.DE)

Market sentiment during today's trading session on European trading floors is very good. The German DE30 is up 1.14%, the French FRA40 is up 0.81%, and the Polish W20 is up 0.14%. 

The most important event of the day was undoubtedly the Bank of England's interest rate decision at 1:00 p.m BST. The BoE, as expected, raised the interest rate by 50 basis points to 1.75% - the highest level since late 2008. BoE said that it plans to wind down its massive balance sheet at the pace of £10 billion per quarter starting after September meeting (vote will be held on bond reductions in September). However, one seems to be the biggest takeaway from the statement is that Bank of England expects UK economy to enter recession in the fourth quarter of 2022 and forecasts that it will last 5 quarters.

Source: XTB

DE30 index chart, H4 interval. The blue-chip benchmark is seeing gains today and has broken out above the 13,680-point zone. From a technical point of view, the closest supports are the previously mentioned 13,680-point barrier and the 50% Fibo abolition zone. The 13,450-point level also remains an important point. The most important resistance at present is the 61.8% Fibo abolition zone. Source: xStaton 5

News:

• Investors' attention today is primarily drawn to Lufthansa (LHA.DE), which reported good results for Q2 and expects a significant improvement in earnings in the coming months. The company's shares are currently gaining more than 5.5%. The airline expects adjusted EBIT of more than €500 million. Although this figure is almost in line with previous estimates (€585 million), the company's assurances that it will meet these forecasts further delight investors. The company assumes that the factor creating good business will be strong demand for short-haul flights on the Old Continent. Bookings for August-December are currently at 83% of pre-pandemic levels. The premium segment is also doing well. In Europe, the airline industry is struggling with exponential passenger growth. 

Lufthansa's Q2 2022 results. Source: Bloomberg

• Merck (MRK.DE) raised its full-year earnings per share forecast due to positive currency effects. Sales, adjusted operating profit and earnings per share are expected to be better than previously thought, the group announced Thursday. Sales are expected to reach between 21.9 billion euros and 23 billion euros, compared to earlier projections of €21.6 billion-€22.8 billion. Adjusted EBITDA is expected to be between €6.75 billion and €7.25 billion versus last year's €6.1 billion. 

• Bayer (BAYN.DE) also raised forecasts despite a net loss in Q2 due to provisions stemming from litigation in the U.S. and write-downs in the agricultural sector. Q2 results are as follows:

  Start investing today or test a free demo

  Open real account TRY DEMO Download mobile app Download mobile app

Analyst's action:

• Covestro (1COV.DE) with a "hold" recommendation from DZ Bank. Target price at €34. 

The largest percentage changes of the companies included in the DAX index. Source: Bloomberg 

The most active stocks in the DAX index (DE30). Source: Bloomberg