Summary:

• European equity markets have opened marginally higher despite some political uncertainties in Germany and Austria
• DAX (DE30 on xStation5) gets out of a consolidation
• Daimler (DAI.DE) rises despite a stricter CO2 emissions cuts’ proposal

The beginning of the new week is quite calm despite some political risks which came up during the weekend in Germany and Austria. The former could be afflicted by harder coalition talks after Merkel’s failure in Lower Saxony. In turn, we had a national election in Austria where 31-year old Austrian foreign minister and a leader of the conservative Austrian People’s Party (OeVP) Sebastian Kurz declared victory for his party on Sunday as he campaigned for tougher immigration controls.

The DE30 has broken out of a channel after all which could herald further unfolding of an uptrend. Source: xStation5

Technically, the German index has manged to break above an upper limit of range-trading and has slipped into an ascending channel. Thus, until the price stays within a channel, it could entail further increases. From that point of view a level of 12985 points seems to be a key one to watch. On the other hand, there are risks related to politics as Merkel’s CDU is anticipated to begin coalition talks with FDP and Green Party later this week and with a setback in Lower Saxony it may raise some concerns when it comes to a possibility of forging a new government till the end of the year.

The German DE30 has started the new week a bit higher but moves are not impressive though. Source: Bloomberg

The Asian session was rather upbeat except the Shanghai Composite (CHNComp) which slid 0.35% in anticipation of the Communist Party Congress which is due to kick off this Thursday. On top of that, the NIKKEI (JAP225) closed higher 0.5%, the Hang Seng (HKComp) gained 0.5% as well while the Australian S&P/ASX 200 edged up 0.55%. Notice that the Chinese stock exchange in Shanghai has experienced a stellar performance of late and it could find itself under pressure ahead of the Congress as there has been guesswork that increases were artificially retained in order to underpin moods in households and businesses.

Having looked at the European stock markets quite a sluggish start may be spotted, the Spanish IBEX is taking a hit though being down almost 0.7% after the Catalan leader Puigdemont declined to clarify his position on independence leaving the country in a political tailspin. Let’s pin down the equity markets’ performance as of yet, the DE30 is gaining 0.2%, the CAC40 (FRA40) and the EuroStoxx50 (EU50) are trading slightly above the breakeven line whereas the FTSE100 (UK100) is going up 0.1%.

Company news

Daimler (DAI.DE) is trading almost 1% higher despite new plans unveiled by the EU commission during the weekend being meted out against undue CO2 emissions by 2030. To be precise, the EU’s executive arm will put forward stricter CO2 cuts on 8 November to foster electric car sales. On the other hand, carmakers with 25% or more of sales that are low or zero-emissions to be granted credits allowing them to cut CO2 less, credits cannot be allowed to be sold though.