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European markets trade higher on Tuesday
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DE30 dropped after higher opening
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European car sales dropped the most on record in 2020
German DAX launched today's cash trading higher but has plunged towards yesterday's close shortly after the start of the session. Index bounced off daily lows and currently trades slightly higher on the day. German ZEW economic sentiment index for January was released at 10:00 am GMT and has shown a jump from 55 to 61.8 pts (exp. 60).
According to the Bild report, German Chancellor Angela Merkel wants to extend current lockdown measures until mid-February. Restrictions would be left in place until February 15. This is another extension to the German lockdown as the pandemic situation in the country still has not improved. If confirmed, the move would give more credibility to earlier reports saying that German lockdown may ultimately last until early-April.
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Source: xStation5
DE30 has managed to break back above the 200-hour moving average during the Asian trading hours. However, a quick downward move occurred at the beginning of the European cash session and the index pulled back to the support zone at 13,875 pts. Should we see a rebound from this area, the first resistance level to watch will be an overnight high in the 13,950 pts area. A point to note is that this level lies just slightly below a short-term resistance zone ranging between 13,980 and 14,000 pts levels. Traders should be wary of potentially higher volatility after the US markets open following a long weekend.
DAX members at 9:50 am GMT. Source: Bloomberg
Company News
2020 was the worst year of the European car sales on record. According to data from the European Automobile Manufacturers Association released today, new registrations dropped 24% in 2020 as coronavirus pandemic undershoot demand for vehicles. Sales declined 3.7% YoY in December 2020. Daimler (DAI.DE) experienced a 15% YoY drop in the final month of 2020 while BMW (BMW.DE) saw its sales decline 9.5% YoY during the month. On the other hand, Volkswagen (VOW1.DE) has managed to increase December's sales by 8.2% YoY.
Telefonica Deutschland (O2D.DE) confirmed a mid-term outlook, expecting a cumulated revenue growth of at least 5% in the 2020-2022 period. Company plans to continue an investment programme aimed at boosting growth launched a year ago and said it will have a positive contribution to operating income before depreciation and amortization. The company has also announced that it will propose a 2020 dividend of €0.18 to the general meeting in May, an increase from €0.17 in the previous year.
RWE (RWE.DE) has agreed to sell a 24% stake in 4 onshore wind farms in Texas to Greencoat, the UK investment company focused on wind energy. Transaction is valued at around $160 million. RWE has sold a 51% stake in the project to Canadian Algonquin Power Utilities in the previous month and will retain 25% stake.
Share price of Telefonica Deutschland (O2D.DE) has dipped at the start of today's session as investors viewed a €0.01 dividend increase as disappointing. Stock dropped to the support zone at €2.24, where the downward move was halted. While bulls managed to recover a bulk of losses, shares still trade lower on the day. Source: xStation5
