DE30 climbs above 12,900 pts after overnight drop

• European markets recover from overnight drop

• DE30 trades back above 12,900 pts

• Evotec (EVT.DE) and Leoni (LEO.DE) report earnings

European stock markets launched today's session lower but started to recover afterwards. Most of the major stock market indices from the Old Continent trade above yesterday's closing prices already. However, DAX lags behind and trades lower on the day.

Source: xStation5

DE30 plunged overnight but recovery is underway. The index painted a daily low of 12,802 pts during the Asian session and managed to climb back above 12,900 pts in early European trading. Price is testing resistance zone ranging around 12,950 pts since the cash session opened but bulls have lost steam and are unable to break above it. A major support zone to watch should we see a pullback from current levels ranges above 12,750 pts handle. Zone is marked by 50% retracement of late-July correction and lower limit of market geometry (range of the biggest correction in the current upward impulse). On the other hand, should we see a break above the zone at 12,950 pts, DE30 could be set for another test of 13,000 pts area. There are no market-moving releases scheduled for today so headlines and sentiment is likely to play a huge role.

DAX members at 10:15 am BST. Source: Bloomberg

Leoni (LEO.DE) reported a net loss of €123 million for Q2 2020. Net loss in Q2 2019 was €44 million. Provider of energy and data management solutions reported a 46% YoY decline in revenue, to €673 million. Adjusted EBIT stood at €96 million (€14 million last year). The company said that it expects that low was reached in April and gradual recovery in operations seen since will continue. However, Leoni warned that the rest of the year is still extremely challenging.

Evotec (EVT.DE), the German drug research company, reported H1 2020 earnings today. Company reported a net profit of u7.3 million, marking a 31.7% YoY drop. Revenue increased to €231 million against €207.1 million in H1 2019. Adjusted Ebitda was 18.7% YoY lower at €47.3 million. Evotec confirmed full-year guidance and said that its liquidity position remains strong.

Lufthansa (LHA.DE) announced that it will resume flights to India. Thanks to relaxing some Covid-19 restrictions and improved testing facilities in Munich and Frankfurt flights to Dheli, Bangalore and Mumbai will resume on August 13. Lufthansa also relaunched flights from the United States and Canada.

Evotec (EVT.DE) is pulling back below 50-session moving average today (green line). The major support to watch in case declines continue is the 200-session moving average (purple line). This technical hurdle was often respected by price (orange circles) but if price breaks below it, zone at €21.50 may be in danger. Source: xStation5