- All major European indices have started off on the right foot
- DAX (DE30 on xStation5) finally breaks its key resistance
- E.ON (EOAN.DE) and Volkswagen (VOW.DE) lead the gains within the DE30
Getting back to the past we didn’t have so a benign beginning to the week for a longer period of time. One could say that moods have stabilized before the crucial event scheduled for this week – the Federal Reserve meeting. Taking account of the weaker than expected readings of US retail sales and industrial output, relatively low probability of a hike by December we could assume that the bar for the US dollar is set quite low ahead of the meeting.
The DE30 has finally manged to break out of an important resistance line which has been tested three times. Source: xStation5
Technically, the index has opened sufficiently high to break a resistance placed at 12560 points. For this reason an extended move higher could be on the cards. On the flip side, as usual there is a possibility that the DE30 will be trying to close a bullish gap. That said, it could constitute an opportunity to join a potential uptrend. If so, buyers could eye 12640 points as another resistance and even higher if that level is broken.
Moreover, it’s worth mentioning that the euro performance has been quite muffled so far, thus an impact on the German equities should be negligible. On the other hand, if sellers prevail going further in the day, a return to declines might be likely. Nonetheless, given rosy spirits all around the world (a higher close on Wall Street on Friday and decent rises in Asia) a continuation of an increase seems to be a base scenario.
The DE30 has opened higher while all listed stocks are trading above the breakeven line. Source: Bloomberg
Looking back to the Asian session one could notice that decent gains were made. Otherwise, it needs to add the Japanese stock exchange was closed today due to holiday while the remaining major indices marked nice increases. To be precise, the Hang Seng (HKComp) was by far the strongest performer adding as much as 1.2% to its valuation, the Shanghai Composite (CHNComp) picked up 0.3%, the Australian S&P/ASX 200 edged up 0.45%.
Moods in Europe are fairly well with the German DE30 leading the gains and increasing 0.6%. On top of that, the CAC40 (FRA40) is rising 0.45%, the EuroStoxx50 (EU50) is going up 0.5% while the FTSE100 (UK100) is upping 0.3%. In turn, when we take a broader look at the European equity markets, the Spanish IBEX (SPA35) is edging higher more than 0.8%.
Volkswagen (VOW.DE) and E.ON (EOAN.DE) are among top performers within the DE30, no noteworthy reports have been issued though. On the other hand, Deutsche Post (DPW.DE) is higher as well on the back of the news that both Deutsche Post and United Nations Development Program (UNDP) will support the Kazakh authorities in their efforts to build resilience against future natural disasters.
In addition, the Deutsche Boerse’s supervisory board is said to prepare changes to the compensation program for CEO Carsten Kengeter, according to Handelsblatt. The German stock exchange declined to comment.