- German DAX gains 0.57% with utilities leading (+1.30%)
- Porsche AG presents a buying opportunity according to Citigroup, following a significant 9% stock decline this week that pushed shares to record lows.
- German Economic Indicators showed further weakness in November, with the HCOB Composite PMI falling to 47.3 from 48.6.
General market situation: European markets are showing broad strength today, with the Polish W20 leading gains (+0.64%), followed by Swiss SUI20 (+0.48%) and German DE40 (+0.45%). The Dutch NED25 (+0.30%), UK's UK100 (+0.29%), and pan-European EU50 (+0.21%) are also trading higher, with the Spanish SPA35 matching EU50's performance at +0.21%. The Austrian AUT20 (+0.20%), French FRA40 (+0.09%), and Italian ITA40 (+0.06%) are showing more modest gains, but still maintaining positive territory.
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Dax Returns by Sector. Source: Bloomberg Financial LP
Looking at the German DAX sector performance, the market shows a predominantly positive bias with all sectors trading in green territory. Utilities lead the gains (+1.30%), followed by Materials (+0.69%) and Health Care (+0.85%). Communication Services (+0.69%) and Information Technology (+0.86%) are showing solid performance. Consumer Discretionary (+0.45%), Industrials (+0.46%), and Consumer Staples (+0.07%) display more moderate gains. Financials are up (+0.15%), contributing to the overall positive sentiment. The market breadth is exceptionally strong, with all 10 sectors trading higher, suggesting broad-based buying pressure across German equities. The aggregate DAX performance shows a gain of +0.57%, reflecting the positive momentum in European markets.
The improved market sentiment is particularly evident in the sector rotation, with defensive sectors like Utilities and Health Care performing strongly alongside cyclical sectors, indicating balanced market participation. This positive performance comes despite recent challenging German PMI data, suggesting investors may be looking past near-term economic concerns.
Volatility is currently observed in the broader European market. Source: xStation
The German DE40 Index is trading above the 38.2% Fibonacci retracement level after breaking it yesterday. For bears, the 50% Fibonacci retracement level is the first test, having previously acted as support. If breached, the 100-day SMA and 61.8% Fibonacci retracement level could be retested. For bulls, key resistance lies above 50-day SMA at 23.6% Fibonacci retracement level. This level has acted as strong resistance. RSI is set for bullish divergence, while MACD tightens with a possible bullish signal. Source: xStation
News
- Zalando SE (ZAL.DE) received a vote of confidence from Citi, which raised its price target to €38 from €37.50 while maintaining a Buy rating. The minor adjustment in target price suggests steady confidence in the online retailer's fundamentals despite challenging market conditions.
- BMW (BMW.DE) announced plans to implement a price increase of up to 3% across its entire model range, effective January 1, 2025 in India. The adjustment will affect both locally produced vehicles, including the 2 Series Gran Coupe and X-series models, as well as imported CBU models like the i4, i5, and i7. This pricing strategy reflects the company's response to market conditions in the Indian luxury automotive segment.
- Brenntag (BNR.DE) shares surged up to 3.9% following Berenberg's upgrade to Buy, with an unchanged price target of €76. The broker sees the stock as "priced too pessimistically" heading into FY25, noting that while volume recovery might be modest, pandemic-era comparables have been fully lapped. The stock currently maintains a mixed analyst consensus with 11 buys, 8 holds, and 3 sells.
- Porsche AG (P911.DE) presents a buying opportunity according to Citigroup, following a significant 9% stock decline this week that pushed shares to record lows. Despite investor concerns, analysts Harald C Hendrikse and Soumava Banerjee maintain their Buy rating, arguing that current peak fears about China exposure and potential tariff impacts are likely overblown. The stock has declined 28% year to date.
- German Economic Indicators showed further weakness in November, with the HCOB Composite PMI falling to 47.3 from 48.6. While Manufacturing PMI marginally improved to 43.2, beating forecasts of 43.1, the Services PMI unexpectedly contracted at 49.4, missing expectations of 51.8 and marking a significant decline from the previous 51.6. These figures suggest mounting challenges for Europe's largest economy.
Other news coming from individual DAX index companies. Source: Bloomberg Financial LP
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