DE30: Sluggish start of the European session

Summary:

• Trump bashes Germany during NATO summit

• DAX (DE30 on xStation5) tries to climb back above the 12450 pts handle

• Thyssenkrupp (TKA.DE) gets boosted at Citi

Major stock benchmarks from Wall Street followed into their European peers footsteps and finished yesterday’s session lower. However, the attitude changed during the Asian session as we saw gains all across the continent. Australian S&P/ASX 200 (AUS200) and Chinese Hang Seng (CHNComp) both added around 0.85% while in Japan Nikkei (JAP225) moved 1.17% higher.

Following an upbeat Asian session stock markets in Europe opened mostly in green. Russian equities can be named underperformers as RTS index (RUS50) is the only major European index to open with a downside price gap. Refiners are the biggest underperformers in the first minutes of trade on the Old Continent. On the other hand, miners and media stocks are leading gains.

Yesterday we wrote about NATO summit in Brussels. During the first day of the meeting cracks in the integrity of the alliance could be spotted. Namely, Donald Trump kept accusing Germany of being “captive” to Russia. He referred to Nord Stream gas pipeline that is being built by Germany and Russia. The Russian theme may be alive for some time as on Monday, July 16 Trump is scheduled to meet with Putin in Helsinki. Apart from the earlier mentioned issue NATO members discussed Turkey purchasing Russian anti-aircraft missile system. The talks will be continued today.

Major European stock benchmarks after the first hour of trade:

• DAX (DE30): +0.17%

• CAC40 (FRA40): +0.12%

• FTSE 100 (UK100): +0.31%

• IBEX (SPA35) -0.22%

• FTSE MIB (ITA40): -0.4%

• RTS (RUS50): -0.65%

DE30 tries to climb back above the 12450 pts handle. Source: xStation5

DE30 broke below the 12450 pts handle yesterday and 33-period moving average. The benchmark slid beneath 12400 pts for a while but managed to climb back above this level. Despite opening higher today the German index once again smashed 12450 pts handle and 33-period moving average. However, after closing the upside price gap DE30 began to erase some of the losses. The benchmark trades close to the 12450 pts at press time. Closing of a daily candlestick above this barrier may provide bulls with some optimism.

Despite 60% of DAX components trading higher the gain of the whole index is minor. Source: Bloomberg

Company News

Thyssenkrupp (TKA.DE) suffered from the ongoing trade dispute. The stock is now trading 14% lower YTD. However, some positive news spurred as of late and the company is one of the DAX leaders today. Namely, Citi raise the recommendation for Thyssenkrupp to “buy”. The Bank sees company’s free cash flows as positive and recognizes progress made in restructuration. Citi raised the price target for Thyssenkrupp from 25 euros to 26 euros. After the first hour of trade the company has traded 0.9% higher.