Summary:
- European equities advance in spite of declines in Asia
- DAX (DE30) trades back in the vicinity of 12600 pts handle
- Bayer (BAYN.DE) may get $80 million Roundup fine reduced
The S&P 500 managed to close at the highest level in history yesterday but the Chinese indices failed to rally on this optimism. Nevertheless, declines observed during the Asian trading hours were not echoed in the first hours of the European session. All blue chips indices from the western part of the Old Continent are trading higher with Italian and Belgian equities gaining the most.
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DAX (DE30) is trading back in the vicinity of the 12600 pts handle on Wednesday. In case the upbeat moods prevail, an upward move may extend to the nearest resistance level at 12850 pts handle. DAX reacted to this level a few times over the past two years. However, the index failed to close above the 12600 pts handle at the beginning of the week therefore traders should be aware of bears lurking above this level. Source: xStation5
Bayer likely to see $80 million Roundup fine reduced
Bayer (BAYN.DE) stock prices rises on Wednesday thanks to news coming for the United States. Federal judge said that he will probably reduce the $80 million fine that was awarded to Bayer in a Roundup case related to a man from California. The judge said that the punitive portion of the fine was miscalculated and may be reduced. This is the second verdict that the company tries to reduce and may succeed. Earlier, state court in San Francisco reduced other verdict from $289 million to $78.5 million. However, the biggest fine that was awarded so far ($2.055 billion), is yet to be challenged by the company.
DAX members at 9:49 am BST. Source: Bloomberg
Other company news
Vonovia (VNA.DE) and Henkel (HEN3.DE) can be found among DAX leaders in the first hours of Wednesday’s session. Both stocks are trading higher on the back of upgrades they have received over the night. Vonovia was upgraded at Kempen & Co from “neutral” to “buy” and its price target was set at €47. Henkel’s recommendation was raised at Goldman Sachs. The Bank also upgraded the company from “neutral” to “buy” and raised 12-month price target from €94 to €100. Goldman Sachs analysts’ reasoned their decision saying that the company has a strong balance sheet and has lagged, both the broad market and peer group, over the past months.
Handelsblatt reported that the Deutsche Telekom (DTE.DE) may slash as much as 1200 sales jobs. The cut would be delivered through reducing the number of sales locations from 500 to 460. Significant decline in demand over the past few years is said to be the main reason behind the move. When asked for a comment, the Deutsche Telekom told the newspaper not to take part in speculations. However, the German telecom confirmed that online business is becoming more important for the company.
Duerr (DUE.DE) is the worst performing MDAX member on Wednesday. The stock is falling following a downgrade at Landesbank Baden-Wuerttemberg. Recommendation for the stock was lowered from “hold” to “sell” and price target was cut from €37 to €29.
Vonovia (VNA.DE) bounced off the upward sloping trendline at the end of the previous week and saw strong gains since the beginning of this week. The stock is testing the resistance zone at €44.50 handle, marked by local highs from August 2018 and February 2019. A break higher could pave the way towards the €47 handle that halted an upward move back in March 2019. Source: xStation5
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