• All major European indices have begun the day with modest losses
  • DAX (DE30 on xStation5) bounces off its critical resistance line
  • RWE (RWE.DE) loses ground following the adverse call

The European equity markets have begun the day with modest losses after quite a disappointing session in Asia and fairly a positive one seen across the pond. The euro has gained a foothold immediately when the Europe’s desks have gotten started which could be a slight drag on the stocks listed on the DE30. At first, let’s have a look at a technical analysis.

link do file download linkThe DE30 has failed to break a crucial resistance which we’ve mentioned of late. Source: xStation5

First of all, the price action suggests that the DE30 is still respecting quite a narrow range of trading. Notice that the price hasn’t been able to break through 12560 points during the latest hours, hence a move downwards could be in the offing. Nevertheless, one could add that buyers have to beat a lower limit of an ascending channel in order to take the price down. If so, there is a possibility to get a leg lower even towards a 38.2% retracement of the last quite an impressive increase. That level is uninterruptedly underpinned by a notable support zone.

On the flip side, a breakout of 12560 points may result in a leg higher, it could be contained though as more sellers might lurk around 12640 points. Having said that, as for now it’s not a base scenario while investors might abstain from riskier assets bracing themselves for potential rumbles delivered by the Federal Reserve tomorrow. To sum up, until the price leaves an ascending channel, swings ought to be restricted.

link do file download linkRWE is decisively the weakest stock within the German index following the downbeat call. Source: Bloomberg

Let’s sum up the Asian session which brought rather poor outcomes. First and foremost, one needs to explain a huge move on the Japanese NIKKEI (JAP225) which surged as much as 2%. A holiday on Monday could account for that a rally when stocks all around the world registered decent performance. Elsewhere, there were much less positives. Namely, the Shanghai Composite (CHNComp) closed down 0.2%, the Hang Seng (HKComp) lost 0.5% whilst the Australian S&P/ASX 200 edged lower 0.1% after the inconclusive account of the latest RBA meeting.

In Europe, some continence can be clearly spotted as major indices are walking a tightrope between green and red. Losses have been contained as of yet though with the DE30 slipping 0.2%, the largest drop seen thus far. Otherwise, CAC40 (FRA40) and EuroStoxx50 (EU50) are going down 0.1% while the British FTSE100 (UK100) is treading water.

Company news

As far as stocks listed on the DE30 are concerned, RWE (RWE.DE) is the most beleaguered one losing over 1% following the recommendation from Exane BNP Paribas. The stock was downgraded from neutral to underperform, the price target was upped though from 19 EUR to 19.4 EUR. Anyway, it leaves a marginal scope for the stock to decline given the spot being traded at 19.8 EUR.

On the other hand, Lufthansa (LHA.DE) is slightly gaining momentum after the updated outlook for European airlines provided by Goldman Sachs. The bank raised estimated EBITDA for 2017/2018 by 8% due to favorable pricing environment, stronger euro.