DE40: European equities mostly green today, Deutsche Telekom Restructures

• European equities show broad strength, with Germany's W20 leading gains (+1.37%) and only Austria's AUT20 declining (-0.16%)

• Deutsche Telekom consolidates wholesale operations under T Wholesale brand, targeting enhanced international service integration and digital innovation

• Real estate sector surges on multiple Jefferies upgrades, with Aedifica jumping 4.4% and LEG Immobilien up 3.5% on expectations of 20-25% shareholder returns in 2025

• Adidas gains on Bernstein upgrade to outperform, citing positive sportswear spending outlook and potential market share recovery

• InPost reports robust Q4 performance with 20% parcel volume growth, UK operations showing particularly strong 58% increase

• Eurozone, core inflation harmonized for December. Actual: 2.7% y/y vs Forecast: 2.7% y/y Previously: 2.7% y/y

General market situation: European markets are showing mixed performance, with most indices trading higher. The German W20 leads gains (+1.37%), followed by the Swiss SUI20 (+0.65%) and French FRA40 (+0.59%). The EU50 and Dutch NED25 are also trading higher (+0.53% and +0.48% respectively). The German DE40 (+0.38%) and Spanish SPA35 (+0.17%) show modest gains. The UK's UK100 (+0.12%) and Italian ITA40 (+0.09%) are slightly positive, while the VSTOXX remains flat (0.00%). The Austrian AUT20 is the only declining index (-0.16%).

Dax Returns by Sector. Source: Bloomberg Financial LP

Looking at the German DAX sector performance, All Securities leads gains (+0.79%), followed by Consumer Staples (+0.69%) and Information Technology (+0.62%). Real Estate (+0.41%), Consumer Discretionary (+0.41%), and Health Care (+0.38%) are also trading in positive territory. Industrials (+0.36%), Communication Services (+0.31%), and Materials (+0.20%) show modest gains. On the downside, Financials declined (-0.41%) and Utilities shows the largest decline (-0.70%). The aggregate DAX performance shows a gain of +0.22%, with market breadth positive as eight out of ten sectors trade higher.

Volatility is currently observed in the broader European market. Source: xStation

The German DE40 Index is regaining bullish momentum, as evidenced by the RSI showing signs of bullish divergence. Additionally, the MACD is tightening, indicating the potential for a bullish crossover in the near future.

For bears, a drop below the 61.8% Fibonacci retracement level could lead to a retest of the October high at 19,783, potentially accelerating downward momentum. A decisive break below this level might open the door to a retest of the early November high at 19,525, which aligns closely with the 50-day SMA at 19,729, forming a critical support zone.

For bulls, the 78.6% Fibonacci retracement level at 20,189 now serves as key support. This level had acted as strong resistance for over seven trading days, signaling a resurgence of demand and the strengthening of bullish sentiment. Source: xStation

Corporate News

• Adidas (ADS.DE) Upgraded at Bernstein on Growth Prospects - The German sportswear company received an upgrade to outperform from market perform at Bernstein. The upgrade reflects potential for continued growth momentum following five years of market share losses. A Bernstein survey indicates strong positive sentiment for sportswear spending in 2025, with lifestyle footwear and apparel expected to drive growth.

• Helvetia Considers German Unit Sale - Swiss insurer Helvetia Holding AG is exploring the sale of its German insurance operations, having appointed JPMorgan Chase & Co. to manage the process. The unit, which generated 988 million Swiss francs in written premiums and deposits in 2023 (8.7% of overall business), could fetch between 500-600 million Swiss francs. Non-binding offers are expected in coming weeks.

• European Real Estate Sector Gets Multiple Upgrades - Jefferies upgraded several European real estate companies, citing the highest level of optimism in years. Notable upgrades include Aedifica, LEG Immobilien (LEG.DE), and Unibail to buy, while Vonovia (VNE.DE), Grand City (GYC.DE), and WDP were raised to hold. The sector is expected to see 20-25% total shareholder return in 2025, with double-digit capital returns supported by mid-single-digit dividend yields.

• Sodexo (SW.FR) Q1 Revenue Rises - The food services company reported first-quarter revenue of €6.40 billion, up 1.8% year-over-year, with organic growth of 4.6%. North America revenue increased 2.3% to €3.10 billion, while European revenue grew 1.1% to €2.22 billion. The company maintained its full-year organic revenue growth guidance of 5.5-6.5%.

• Deutsche Telekom (DTE.DE) Consolidates Wholesale Operations - The German telecom giant announced the merger of its national and international wholesale activities into a single entity called T Wholesale. The consolidation combines Deutsche Telekom Global Carrier with Telekom Deutschland Wholesale, serving over 250 domestic and 900 international customers. Under new MD Kerstin Baumgart, T Wholesale will focus on digital communication, AI, network APIs, standalone 5G, and edge cloud innovations.

• InPost Reports Strong Q4 Parcel Volumes (INPST.NL) - The logistics company saw Q4 parcel volumes rise 20% year-over-year to 322.1 million, with Polish volumes up 20% to 209.9 million. UK operations showed particularly strong growth, with Q4 volumes up 58% to 27.2 million parcels. Full-year group volumes reached 1,091.6 million parcels, representing 22% growth.

• Eurozone, core inflation harmonized for December. Actual: 2.7% y/y. Forecast: 2.7% y/y Previously: 2.7% y/y. The EURUSD currency pair did not react to the publication of the in line with expectations macro data from Euro Area. 

Other news coming from individual DAX index companies. Source: Bloomberg Financial LP