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European stocks post small gains on Wednesday
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DE30 tests upper limit of short-term trading range
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Deutsche Boerse acquires Institutional Shareholder Services
European markets launched Wednesday's trading lower but managed to recover in the first hours of the cash session. Small gains can now be spotted on major indices across the Old Continent. However, there is not much momentum in the move and it cannot be ruled out that narrow ranges will prevail for the remainder of the day.
Source: xStation5
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Open account Try demo Download mobile app Download mobile appDE30 has been struggling to deliver a bigger move this week. Index jumped on Monday on the back of positive vaccine news from Moderna but these gains were quickly erased and a sideways move could be observed since. The German index swings between short-term support at 13,070 pts and a short-term resistance at 13,150 pts. The index bounced off the lower limit of the range ahead of the European cash session open and now attempts to break above the upper limit. Should we see a break above, the index may once again target a resistance zone at 13,250 pts that has stopped upward moves a few times during the past 2 weeks. Nevertheless, one should keep in mind that lack of any big near-term catalysts in terms of data releases may support continued range trading. EU member countries are expected to be briefed on the progress of Brexit talks on Friday morning and in case key issues are resolved, indices from the Old Continent may catch a bid.
Company News
Deutsche Boerse (DB1.DE) announced that it will acquire 80% stake in Institutional Shareholder Services, a proxy advisor company, for around $1.8 billion. This is another step in Deutsche Boerse's CEO strategy to grow the company through M&A actions and the largest one since he took over three years ago. An attempt to acquire Milan stock exchange failed this summer. Acquisition of Institutional Shareholder Services will require issuance of $1.2 billion euro of debt and is expected to close in the first half of 2021.
Daimler (DAI.DE) has struck an agreement with Chinese Geely to develop next-generation combustion engines today. Engines will be used in hybrid vehicles. Handelsblatt reported later that the majority of next-generation combustion engines will now be made in China. This has created some confusion among worker unions in Germany, who said the decision was not discussed with them and may result in lay-offs at home.
Deutsche Boerse (DB1.DE) is making the biggest upward correction in the ongoing downward impulse. The most important near-term resistance to watch is the downward trendline at €139. A break above it could hint at a bullish trend reversal. Source: xStation5
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