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Indices from Western Europe trade lower
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DE30 tests 15,250 pts mark but fails to break above
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Aareal Bank rallied after receiving takeover offer
European stock markets are trading mixed on the final trading day of the week, with the majority of benchmarks from Western Europe moving slightly lower. Dutch AEX (NED25) is top underperformer dropping around 0.5% while Polish WIG20 (W20) outperforms other European blue chips indices by huge margin trading almost 2% higher on the day! The big event of the day is, of course, the release of the US jobs report for September at 1:30 pm BST. Note that strong reading may cement expectations for taper announcement in November and therefore have a negative impact on equities.
Source: xStation5
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Create account Try a demo Download mobile app Download mobile appDE30 climbed above the price zone marked with 38.2% retracement of recent correction yesterday (15,150 pts). However, the upward move was halted around 100 points higher, near the 15,250 pts area, and the index gave back part of the gains. A point to note is that the 15,250 handle is marked not only with previous local highs and lows but also with the 200-hour moving average (purple line). Previous test of this moving average (orange circle) marked a local high and the index took another dive lower later. Index moves are expected to become more volatile near NFP release hour (1:30 pm BST).
Company News
Vonovia (VNA.DE) bought call options for a 13.3% stake in Adler, German real estate company that has been targeted by short-sellers and dropped over 50% since the beginning of September. Strike price on those options is €14.00 per share and options are set to expire in one and a half years. Strike price is higher than current market price reflecting Vonovia's belief that pressure on Adler's shares will be short-lived.
Aareal Bank (ARL.DE) confirmed yesterday that it is in talks with two investment companies - TowerBrook and Centerbridge - over acquisition of a majority stake in the Bank. Indicative offer at €29 per share was made. As the proposed takeover price was over 20% higher than pre-announcement market price, shares of Aareal Bank rallied yesterday in the late afternoon. Stock finished yesterday's session 23.7% higher. Shares are trading a touch lower today.
Analysts' actions
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United Internet (UTDI.DE) upgraded to "buy" at LBBW. Price target set at €38.00
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Daimler (DAI.DE) upgraded to "buy" at UBS. Price target set at €100.00
Share price of Aareal Bank (ARL.DE) skyrocketed yesterday after the company announced it has received a takeover offer at €29.00 per share. Stock rallied to almost €30.00 per share but has failed to break above the 161.8% exterior retracement of Q2 2021 correction and gave back part of the gains later on. The fact that share price still holds near €29.00 mark suggests that market sees a high chance for the deal to go through. Source: xStation5
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