Summary:
-
Economists grow more and more concerned about the European economy
-
DAX (DE30 on xStation5) tests 11000 pts handle at press time
-
Siemens (SIE.DE) expects decent growth of its energy unit
Stock in Europe opened broadly higher on the final trading day of the week. The biggest gains were observed on the Russian and Swiss bourses in the first minutes of today’s trading while Austrian equities underperformed the most. Refiners and car makers lead gains while travel companies’ index trades a notch below yesterday’s close.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile app
DE30 has struggled to break into the resistance zone ranging 10970-11040 pts as of late. Nevertheless, recent improvement in investors’ moods help the German benchmark finally dip into the aforementioned zone. DE30 is testing the 11000 pts handle at press time. Source: xStation5
Economists are growing more and more concerned about the state of the European economy. Since June 2018 most of respondents in Reuters polls hinted that ECB may start raising interest rates during the third quarter of 2019. However, the latest poll showed that now economists’ consensus points to the fourth quarter of the year rather than third. Moreover, range of weakish data combined with still present trade tensions made experts more cautious about the growth itself. Respondents claim that mild recession in the euro area is possible in case a significant economic slowdown is spotted in the United States or in case conflict with China escalates. According to the surveys, economists assessed the probability of recession occurring during the next two years at 30% while now it sits at 35%. Chances that the European economy will contract this year also rose, from 20% to 25%.
Meanwhile, the leader of the UK House of Commons, Andrea Leadsom, announced that the vote on the Theresa May’s Brexit “Plan B” will take place on Tuesday, January 29. What is interesting is the fact that no “‘Plan B” has been present yet. May is expected to outline next steps in the Brexit process on Monday.
Major European stock market indices after the first hour of trade:
-
DAX (DE30): +0.86%
-
FTSE 100 (UK100): +0.78%
-
CAC40 (FRA40): +1.03%
-
IBEX (SPA35): +1.16%
-
FTSE MIB (ITA40): +0.60%
Deutsche Bank (DBK.DE) outperforms at the beginning of the trading session for another day in a row. Source: Bloomberg
Company News
Fresenius Medical Care (FME.DE) is one of the DAX leaders today. The company announced the launch of its new dialysis machine in India today. The device will help diagnose and treat patients with the end-stage renal disease (ESRD), also called kidney failure. It is estimated that around 90% of Indian people suffering from ESRD dies because they cannot afford treatment or it is unavailable in their region.
Siemens (SIE.DE) looks to be set to achieve a decent pace of growth of its energy unit this year. According to Lisa Davis, CEO of the Siemens’ energy unit, the company expects this segment to grow at the pace of around 5% this year. Moreover, Siemens is also in talks with the Iranian government over a project that could rehabilitated country’s power infrastructure.
Brilliance China Automotive Holdings, partner of BMW (BMW.DE) on the Chinese market, agreed to sell 25% stake in the joint venture to its German ally. Once the deal receives regulatory clearance BMW’s stake would increase to 75%. Transaction is expected to close no later than 2022.
