- European stock markets have started off on the right foot as geopolitical risks have receded
- DAX (DE30 on xStation5) has opened with a huge bullish gap
- Europe’s insurers rally on softer Irma damages
The European equity markets have begun the new week with upbeat spirits which is a consequence of softer losses coming from the hurricane Irma. Moreover, North Korea decided not to launch its ballistic missile which strengthened demand for riskier assets. It’s worth underlining that the DE30 is being shored up mainly on the back of stellar performance of European insurers which are benefiting from softer than expected Irma losses.The DE30 is rising sharply following fading Irma-fueled concerns marking a noticeable bullish gap. Source: xStation5
Let’s begin with a technical analysis which seems to act in favor of bulls. First of all, the price has managed to maintain above a local support zone of late which has been a first sign that buyers could try to come back before long. Secondly, today’s candlestick is boding quite well for the index in the upcoming days. As for now, 12320 points could be treated as a first more notable support line. First hurdles could emerge in the vicinity of 12500 points though.
On the other hand, given that the price broke through an upper limit of a channel one could predict that a range for increases could stand at 12600 points (measured by a purple rectangle). That level is followed by 12640 points being another noteworthy resistance line. Let us spot that the euro has traded pretty flat thus far, hence an impact on the German major index has been negligible as of yet.
Almost all stocks listed on the German DE30 are going up today taking advantage of receding geopolitical risks. Source: Bloomberg
Let us sum up the Asian session which turned out splendid after all. The Japanese NIKKEI (JAP225) was the most standout one and gained as much as 1.4%. Besides, the Australian S&P/ASX 200 managed to add 0.7%, the Hang Seng (HKComp) picked up 0.65% whereas the Shanghai Composite (CHNComp) increased 0.35%.
In Europe, there is widespread green as all major indexes are trading close to 1% above their Friday’s close. By and large, just the British FTSE100 (UK100) is adding 0.5% trailing behind its peers. Uncertainties surrounding Brexit negotiations could be among reasons for worse performance. On top of that, CAC40 (FRA40) is edging up 1.2%, the DE30 is gaining 1.1%, the EuroStoxx50 (EU50) is beefing up 1.15%, the same gain is seen at the FTSE MIB (ITA40).
Taking a closer look into the breakdown of the DE30 one could spot that Muenchener Rueckversicherungs Gesellschaft (MUV2.DE) is decisively the best performer stock. That remarkable gain stems from the fact that possible devastation after the hurricane Irma might be less sizeable that it’s been estimated as the storm has been downgraded to a category 1 before hitting the West Coast of Florida.
Otherwise, it’s worth mentioning Thyssenkrupp (TKA.DE) which is gaining a foothold after the report the company is expected to rise its employment in line with industry growth if 2-4% a year. In addition, the firm wants to pare back administration costs.