- DAX falls ahead of NFP report
- Morgan Stanley cuts recommendation on LEG Immobilien (LEG.DE) and Vonovia (VNA.DE)
- PNE (PNE3.DE) sells its US operations to US investor Lotus Infrastructure Partners
Overall market situation:
This week's final trading session on European markets turns to the NFP data from the US. It is their reading that may determine whether the benchmarks will close Friday's session with the sizable declines we are seeing now. Germany's DAX is losing 0.9%, the UK's FTSE 100 is off 0.55%, and France's CAC 40 is losing nearly 1%. The final reading of Q1 GDP data for the Eurozone did not surprise investors, however, the slightly hawkish nature of the report may have been triggered by higher data on wages per worker (a reading of 5.1% y/y vs. the last reading of 4.6% y/y). A worse market picture was provided this morning by Germany's industrial production data (reading below expectations).
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Source: XTB
Volatility currently observed in the DAX index. Source: Bloomberg Financial LP
Volatility currently observed in the broad European market. Source: xStation
The German benchmark DE40 is seeing declines of nearly 0.95% during today's session. The index continues to hold the structure of the downtrend initiated on May 16. The continuation of the downward trend led to the testing of a historically important support level in the zone of the 50-day exponential moving average (blue curve on the chart, all the time it remains a key support point). Locally, the most important resistance all the time remains the historical peak at the level of 19,000 points, as well as the zone of 18,840 points, which is close to the current quotations (the index has violated this zone several times, it has been a point of both support and resistance in the past). Source: xStation 5
News:
LEG Immobilien (LEG.DE) and Vonovia (VNA.DE) are leading the declines among real estate stocks in Europe after Morgan Stanley downgraded both German companies. The investment bank believes that the German market is no longer characterized by as much acticity as it is in the UK, for example. Moreover, after the ECB's first interest rate cut, room for further catalysts is limited.
LEG shares have been downgraded to “equal-weight” and VNA to “underweight.” The target price for LEG Immobilien shares has been set at 78 euros per share, and Vonovia at 24 euros per share.
VNA's shares are currently losing 4.7%, while LEG's are down nearly 3.5%. Source: xStation
On the other hand, Infineon (IFX.DE) benefited from positive comments from analysts at Exane BNP Paribas, who raised their target price for the company to €53 per share.
Wind and photovoltaic project developer PNE (PNE3.DE) is selling its US operations to US investor Lotus Infrastructure Partners. PNE did not disclose the price. Shares are up about 1%.
Other news coming out of individual companies in the DAX index. Source: Bloomberg Financial LP
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