• European stock markets have kicked off the day lower across the board
  • German DAX (DE30 on xStation5) remains closed within quite a narrow range
  • Deutsche Post (DPW.DE) falls after the news on a possible purchase of the company’s entity

The new trading week has begun with a subsequent wave of geopolitical tensions following another warning from North Korea towards the US as the latter country along with South Korea begin military exercises today. Kim Jong Un said that military exercises are ’a reckless move’ which could result in the uncontrollable phase of a nuclear war. Even as the FX market has broadly shrugged off those remarks, stock investors beg to differ as all major indices in the old continent are declining in the morning.

link do file download linkDE30 is losing momentum as the new trading week gets underway. Source: xStation5

A technical view looks by far not favorably for buyers as the index is approaching a relevant support zone at 12080 points which has constituted the last resort for them as of yet. Having assumed that the price manages to break it out to the downside, it could lead to a sharp decrease as a lot of stop orders could lurk just under that level. Under such a scenario, sellers could aim for 11800 points as the next notable objective. 

On the other hand, if price is able to maintain above a green rectangle, it could give rise to an upward move, however a bullish candlestick should be drawn before, to get more conviction. Keep in mind that Wall Street failed to wipe off Thursday’s declines on Friday, hence it could be a drag on European stocks as well. That said, should US indices kick off the week higher (it hasn’t been seen so far looking at the futures), it could be a boost for European investors to change their mind and put more money into riskier assets once again.

link do file download linkThe DE30 has failed to recoup last week’s losses thus far as it has reversed after the beginning almost right off the bat. Source: Bloomberg

At first, let’s whip through Asian indices which were able to perform fairly well. The standout ones were those in Shanghai (CHNComp) and Hong Kong (HKComp) which added 0.55% and 0.65% respectively. Otherwise, the NIKKEI (JAP225) lost 0.4% while the Australian S&P/ASX (AUS200) took 0.35% out of its valuation.

Meantime, the European indexes are declining across the board. The DE30 is losing 0.5%, the CAC40 (FRA40) is going down 0.6%, the EuroStoxx50 (EU50) is slipping 0.6% whilst the FTSE100 (UK100) is edging lower just 0.3%.

Company news

Deutsche Post (DPW.DE) is giving back all but 1% after the news which came in over the weekend. According to Sunday Times, Advent International is in exclusive talks to buy Williams Lea from Deutsche Post for between 350m GBP and 400m GBP.

On to of that, the sole gaining company in Lufthansa (LHA.DE) which is up due to CEO’s statement delivered on late Friday. Carsten Spohr, CEO of Lufthansa, said he was ready to welcome large numbers of employees from insolvent competitor Air Berlin to build up his airline’s Eurowings unit, promoting his company as a safe haven for jobs.