DE30 moves higher on trade optimism

• European indices move higher on trade optimism

• DE30 extends gains after closing above 12650 pts

• Investors call on Wirecard (WDI.DE) to investing accounting issues

Most of the European stock market indices from the Western Europe trade higher on Thursday. Comments from China can be named as a reason behind the upbeat performance. The Chinese Ministry of Commerce said that the goal of China is not to stop the trade war but to remove all the tariffs. Moreover, reports surfaced saying that the US and China are discussion “Phase Two” talks. While these news were not confirmed yet, they seem to be enough to lift indices a bit in the morning.

Source: xStation5

In spite of intraday struggles, DE30 managed to close higher and above early-July peak at 12645 pts yesterday. The German index is pushing higher today and the focus shifts to important resistance at 12825 pts. The 12590-12645 pts area remains to serve as a near-term support zone and should be watched closely in case on any pullback. Traders should keep in mind that risky assets, like stock market indices, are likely to be subject to increased volatility today as EU and UK officials will meet at Brexit summit while US Senate is expected to approve a bill supporting protests in Hong Kong. China strongly opposes the approval of the bill and, in case Senate goes through with its plans, Sino-US relationship may deteriorate.

DAX members after the first hour of trade. Source: Bloomberg

Wirecard (WDI.DE) continues to trade under pressure following Financial Times reports saying that company engaged in accounting misconduct. The German payments company denied allegations but shareholders do not think its enough. Numerous Wirecard investors called on the company to investigate the issue amid significant share price slump. Wirecard trades around 15% lower against last week’s close.

Deutsche Lufthansa (LHA.DE) trades among DAX leaders today. The move can be ascribed to re-opening of the Hamburg airport. Let us remind that a bomb from World War II was found in the vicinity of Hamburg airport yesterday and all flights were suspended due to safety concerns. Moreover, all of the jets that were grounded by Lufthansa’s Swiss subsidiary are back in the air.

GEA Group (G1A.DE) received a downgrade at Commerzbank. Recommendation for shares of the German technology company was raised from “reduce” to “buy”. Price target was set at €32, implying a 20% increase against yesterday’s closing price.

Wirecard (WDI.DE) continues to be pressured by concerns over its accounting practices. The stock lost around 15% this week and may be set to slide further in case the management fails to act properly. Note that the stock still has not recovered from a slump triggered by Financial Times reports at the beginning of the year. Source: xStation5