- European stocks are trading higher in early trading
- DAX (DE30 on xStation5) jumps higher but upward potential could be limited
- E.ON raises the most among German DAX
Investors have begun a first trading day of the week in decent moods. Moreover, a positive session in Asia could have helped German DE30 to retain its upward momentum. After the G20 summit , where market participants closely watched meeting between Trump and Putin, investors’ focus has shifted to central bankers this week with Wednesday being the most abundant in macroeconomic events.
The DE30 has jumped higher on the Monday trading following an overall positive session in Asia. A push higher has a good chance to proceed as a demand zone below halted a further decline. However, the DE30 could face a strong resistance above. Source: xStation5
The demand zone located between 12102 and 12288 (a green rectangle) has worked well as a support thus far and the price had bounced higher. Since the recent recovery has amounted to just 150 points, it does not bode well as not many buyers entered the market. From this standpoint, a further move to the upside is still likely however, a supply above could bring the price lower. A downward trend line crosses with a broken upward trend line which sparked a move lower on Thursday. Moreover, between 12525 and 12725 there is a supply zone where potential sellers could lurk.
Majority stocks listed on the German bourse are trading in the positive territory: Source: Bloomberg
Looking back to the Asian session, a positive tone has been seen on most stock exchanges. The Japanese NIKKEI (JAP225) inched higher by 0.76 percent, the Shanghai Composite (CHNComp) lost a mere 0.17 percent while the Hang Seng (HKComp) declined by 0.35 percent . The Australian S&P/ASX200 (AUS200) gained 0.37 percent. In Europe, investors appear to be more optimistic as all major indices have turned green in early deals. The DE30 gains 0.46 percent while FTSE100 (UK100) and CAC40 (FRA) inch higher by a 0.25 percent. The pan-European Eurostoxx EU50 trades higher by 0.19 percent.
Taking a look closer at specific stocks there is E.ON (EOAN.DE) which is gaining after reports that the company will probably boost a payout range from current outlook of 50-60 percent of adjusted net income on a successful nuclear fuel tax ruling, probable sale of remaining 47 percent Uniper’s stake. Moreover, company could reduce finance expenses by 300 million euros by 2020 compared with 168 euros in previous estimates. The E.ON gains 2.17 percent with a spot price at 8.42 euros.
On the other side of the spectrum, only four components of the German DE30 trade below a Friday’s close however, loses are rather marginal with a range between 0.1 and 0.4 percent. The worst performer in the index is Adidas which received 17 ‘buy’ and 18 ‘hold’ recommendations.