DE30: China-US phone call fails to support European equities

• Stocks in Europe decline at the beginning of Tuesday's session

• DE30 tests the 200-hour moving average in the 13200 pts area

• Siemens (SIE.DE) is said to be looking to increase stake in Siemens Gamesa (SGRE.ES)

Moods at the beginning of the European session are not as optimistic as they were yesterday. Majority of the major European stock market indices trade lower with Russian and Belgian equities taking the biggest hit. Swiss shares show resilience as the SMI index (SUI20) remains in the positive territory. Travel companies underperform the most while real estate sector holds firm.

Source: xStation5

DE30 rallied over the night on another optimistic news from Sino-US trade front. The German index tested the upper limit of the consolidation range at 13300 pts but failed to break above. In turn, the sideways move scenario remains intact. Following a failed attempt of breaking above the trading range, DE30 pulled back towards the midpoint of the range (13220 pts area). Initial dip below this hurdle was halted by the 50-hour moving average (green line) but repeated attempt saw index drop to 200-hour moving average (purple line, 13200 pts area). Buyers are trying to keep the price above this technical hurdle.  Should the index break below it, the lower limit of the range could come into play.

DAX members at  9:13 am GMT. Source: Bloomberg

Bloomberg reported yesterday that Siemens (SIE.DE) is interested in buying 8% stake in wind-turbine maker Siemens Gamesa Renewable Energy (SGRE.ES) from Iberdrola (IBE1.ES) in order to strengthen its renewables portfolio. According to the report, the German conglomerate is willing to pay a premium to the market value of the stake. Should the transaction go through, Siemens would have 67% in Siemens Gamesa Renewable Energy. Neither of three mentioned companies commented on the news so far. Shares of Siemens Gamesa jumped 8.5% yesterday while Siemens closed 1.4% higher.

Wintershall, subsidiary of BASF (BAS.DE), announced that it has made an oil discovery in Norwegian Sea. However, the discovery is said to be a minor one as it accounts to less than 1 million cubic meters of oil. The company said that it may be unprofitable to extract crude from this field.

Berenberg initiated coverage of Linde (LIN.DE) shares. The investment bank issued a “buy” recommendation for share of the German company. Price target was set at €210, implying 13% increase against yesterday’s close.

Shares of Linde (LIN.DE) pulled back from an all-time high earlier this month. However, the decline has bottomed out at the support zone ranging above the €185 handle. The near-term resistance can be found at the recent peak in the €190 area. On the other hand, break below the €185 handle would pave the way towards the support at €180, and potentially lower limit of the Overbalance structure at €178.50. Source: xStation5