DE30 bounces off 12,600 pts area

• European stock markets trade slightly higher

• DE30 bounces off the 12,600 pts area

• Siemens to take €2.8 billion writedown

European stock market indices are trading slightly higher on the final trading day of the week. Major blue chips indices from Western Europe like German DAX or French CAC gain 0.3-0.4%. Spanish IBEX (SPA35) and Polish WIG20 (W20) are European top performers, trading over 1% higher each. Economic calendar for today is packed with release that tend to have small if any impact on the markets. However, US ISM release at 3:00 pm BST may result in some short-term voaltility

Source: xStation5

DE30 managed to halt declines in the 12,600 pts area, at least for now. Index recovered some ground and tested 12,840 pts swing area, marked with recent local low, but failed to break above on the first try. Clearing this hurdle would open the way towards a key near-term resistance - the upper limit of a local market geometry at 13,060 pts. A 23.6% retracement of the downward move started at the beginning of June can be found slightly above at 13,100 pts. A break above the 13,050-13,100 pts area would brighten near-term outlook for the bulls and may set the stage for a larger recovery move.

Company News

Siemens (SIE.DE) said that it will take a €2.8 billion writedown on a stake in Siemens Energy (ENR.DE), in which Siemens has 35% stake. Writedown will be reflected in the company's fiscal-Q3 results (calendar Q2 2022). Company was expected to report net profit of €1.5 billion for the quarter but is likely to report a loss if writedown is included.

TUI (TUI.DE) said that it repaid €671 million of Covid-19 state aid yesterday, or €725 million including interest. Company said that it expects a strong business during the summer period and that it hopes to further strengthen its balance sheet and reduce debt.

Moody's downgraded Commerzbank (CBK.DE) from 'A1' to 'A2' with a stable outlook. Ratings agency said that the company's credit position remains strong but it decided to lower rating on technical grounds and should not be viewed as a deterioration in the bank's fundamentals.

Analysts' actions

• Grand City Properties (GYC.DE) upgraded to "buy" at HSBC. Price target set at €18.00

• Bilfinger (GBF.DE) rated "buy" at Deutsche Bank. Price target set at €42.00

Bilfinger (GBF.DE) is one of the best performing German stocks following a "buy" recommendation from Deutsche Bank. Shares trade over 4% higher today and are testing resistance zone ranging below 38.2% retracement of the post-pandemic recovery move (€29.50 area). A break below would pave the way for a test of the next resistance in line - €30.70 swing area. Source: xStation5