Another upward bounce on DE30 market fades

• European stock markets trade lower

• DE30 pulls back after failed test of 15,600 pts area

• Henkel announces €1 billion share buyback

European stock markets are trading lower during the final trading session of the week. In spite of a mixed Asian session, the majority of European blue chips indices trade around 1% lower on the day. Polish WIG20 (W20) and Dutch AEX (NED25) are the worst performing blue chips indices from the Old Continent, dropping around 1.5% each. On the other hand, Russian equities outperform with Russian RTS being the only major European index trading higher today (+1.2%).

German GDP report for Q4 2021 was released today at 9:00 am GMT. Reading confirmed what was rumoured following release of flash 2021 GDP estimates by German authorities earlier this month - German economy contracted in the final quarter of the previous year. Market was expecting such reading with the median estimate pointing to a 0.3% QoQ contraction. However, actual data showed a 0.7% QoQ drop in economic activity. On a year-over-year basis growth in Q4 2021 reached 1.4% YoY. 

Source: xStation5

DE30 jumped yesterday and almost reached 15,600 pts area, where the 200-session moving average (purple line). However, the index started to erase gains as Wall Street began to move lower and finished the day little changed. Strong downward move was launched at the beginning of today's European session with the index pulling back to the 15,300 pts area. Taking a look at the index at a D1 interval, we can see that the first major support to watch in case pullback deepens can be found ranging between 15,070 pts (lower limit of local market geometry) and 23.6% retracement of upward impulse launched in November 2020. However, final support guarding the uptrend - lower limit of the Overbalance structure - can be found much lower in the 14,180 pts area.

Company News

Henkel (HEN3.DE) announced preliminary results for fiscal-2021 today. Company said that sales reached €20.07 billion. Full-year organic sales growth reached 7.8% while adjusted EBIT margin reached 13.4%. Company said that it expects organic revenue growth of 2-4% in 2022 and adjusted EPS growth of -15 to +5%. On top of that, Henkel announced a €1 billion buyback programme as well as the merger of its Laundry & Home and Beauty Care divisions into a single unit called Henkel Consumer Brands.

According to a Reuters report, Siemens Energy (ENR.DE) is reportedly considering taking full control over Siemens Gamesa Renewable Energy. Company may opt to buy 33% of remaining Siemens Gamesa stock through an all-stock deal.

Analysts' actions

• KION Group (KGX.DE) upgraded to "buy" at HSBC. Price target set at €100.00

• Jungheinrich (JUN3.DE) upgraded to "buy" at HSBC. Price target set at €54.00

• KION Group (KGX.DE) upgraded to "buy" at Baader Helvea. Price target set at €108.00

• Daimler Truck (DTG.DE) upgraded to "overweight" at Morgan Stanley. Price target set at €38.00

• Sartorius (SRT.DE) upgraded to "buy" at Societe Generale. Price target set at €612.00

• Siemens Healthineers (SHL.DE) upgraded to "buy" at Jyske Bank. Price target set at €70.00

Shares of Henkel (HEN3.DE) slumped today, following the release of preliminary full-2021 earnings. Stock plunged below the support zone marked with 23.6% retracement of 2021 downward move and is now testing the short-term swing level at €72.80. If bulls fail to hold sell-off there, a downward move towards recent lows in the €70.00 area may be on the cards. Source: xStation5