DE30 plunges towards 12,600 pts as pandemic accelerates

• European markets plunge on lockdown fears

• DE30 drops to 12,600 pts, lowest level October 2

• ElringKlinger (ZIL2.DE) jumps on Airbus deal

European stock markets are in freefall following new Covid-19 case records in numerous countries. Moreover, some countries started to reimpose partial lockdowns. While in most cases this is not related to whole countries but only the most affected regions, one cannot rule out a full lockdown should the situation continue to deteriorate. Berlin decided to curb nightlife while London is expected to announce a ban on indoor gatherings soon. German Chancellor Merkel said that if the spread of the virus is not capped within 10 days, more decisive actions for the whole country will be announced.

Source: xStation5

DE30 dropped below the support at 12,900 pts today. A strong downward move followed and the index plunged to 12,600 pts area, where declines were halted for now. Key support to watch can be found at 12,500 pts and it has been marked with numerous price reactions during the post-pandemic recovery. However, breaking below it would pave the way towards the 12,100 pts area marked with the 200-session moving average (purple line) and the lower limit of the Overbalance structure (yellow box, range of largest correction in the current bull market). Newsflow will be crucial in the days to come as decisions on lockdowns will depend on how pandemic situation develops.

Company News

According to a Reuters report, Siemens (SIE.DE) is in talks over potential sales of its transmissions maker Flender. Talks involve Triton, Carlyle, CVC and Brookfield. Buyout groups were asked to submit final offers next week. Deal may be valued at €1.5-2 billion. 

Borussia Dortmund (BVB.DE) is one of the worst performing German stocks today. Share price of the Bundesliga football club are in freefall amid concerns over a new lockdown in Germany. Actions aimed at curbing virus spread may include ban for audience during soccer matches and it would negatively impact finances of football teams.

ElringKlinger (ZIL2.DE) is one of a few German stocks that trade higher today. The company announced on Wednesday that it has entered an agreement with Airbus (AIR.DE) to develop fuel cell technology for the aviation market. Under the terms of an agreement, ElringKlinger will give Airbus access to useful technologies in return for compensation of "low-to-mid double-digit million euros".

DAX members at 10:32 am BST. Source: Bloomberg