- European equity markets have begun the day with moderate losses
- German DAX (DE30 on xStation5) remains on the verge of a bear market
- Infineon (IFX.DE) and Siemens (SIE.DE) among top movers in the morning
The European stock markets have not had a successful week so far. The German DE30 is still hovering slightly above its critical support. If the support, being the last resort for bulls, is finally broken, it could usher in a more noticeable decline. Meanwhile, today’s session is likely to be quite muted at least till 1:30 pm BST when the US labor market report is released. US labor market data has a significant impact on equity markets all around the world as it could affect the FED’s path of interest rate hikes.
The DE30 is moving within a descending channel and could test a support at 12080 points in upcoming hours. Source: xStation5
As usual, let’s begin with a technical view which has little changed since Thursday. The index is remaining above its crucial support area placed at around 12080 points. However, the price has not managed to break out of an upper limit of a channel, hence it could suggest a fading advantage of bulls. If so, a breakout of the above-mentioned support could take place before long.
On the other hand, if bulls are able to break above an upper limit of a channel, it could lead to a corrective move toward 12200 points and 12300 points afterwards. Nonetheless, it’s not a base scenario as for now. Once the index closed the day below 12080 points, it could hand bears a strong incentive to keep on selling the DE30 in the following week.
20 out of 30 stocks listed on the DE30 are declining in early trading, without substantial losses though. Source: Bloomberg
Looking back to the Asian session there were moderate losses except for the Hang Seng (HKComp) which was able to close marginally above the break-even (0.07%). Elsewhere, losses were quite widespread. The NIKKEI (JAP225) slipped 0.38%, the Shanghai Composite (CHNComp) lost 0.33% whereas the Australian S&P/ASX200 edged down 0.25%. Moreover, it’s worth underscoring that the US Dow Jones closed at its record high yesterday. What’s more, gains could be justified as 72% of all financial reports which have been revealed so far turned out to beat estimations.
Taking a look at the European markets, there are modest losses across the board. The DE30 is edging down 0.14%, the CAC40 (FRA40) is all but unchanged, the EuroStoxx50 (EU50) is slipping 0.13% while the British FTSE100 is sliding 0.06%. All losses could stem from some cautiousness among investors regarding the US jobs report.
Infineon (IFX.DE) is the best performing stock in early deals after the news that the company will supply parts to Tesla’s upcoming mass-market Model 3 electric car. Infineon, which supplies chips to control the batteries and motors in eight out of 10 of the world’s top selling electric vehicles, confirmed its parts would go into the Model 3, which is now ramping up for volume production in 2018.
In terms of the most declining stocks there is Siemens (SIE.DE) which is falling as much as 0.9% in early trading, losses are being continued after the financial report which was unveiled yesterday though. Let us recall that the company downgraded its outlook for a third quarter which raised concerns about an earnings slowdown in a whole year.