DE30: Equities from Western Europe launch new week lower

Summary:

• Le Pen says nationalist parties must defend European civilization

• DAX (DE30 on xStation5) underperforms at the beginning of a new trading week

• BMW (BMW.DE) to recall almost 140,000 cars in China over air conditioning defect

A mixed moods have been observed during the Asian session. Chinese stock benchmarks moved lower as investors feared that the US may impose new tariffs in the ongoing Trade War. However, looking beyond China some gains can be spotted. The Australian S&P.ASX 200 (AUS200) added 0.32%. The Japanese stock exchanges are shut today for the Respect for the Aged Day holiday.

Majority of the European stock indices opened lower on Monday. Steepest declines could be observed on the German market while the Spanish equities underperformed just minorly in the first minutes of trade. Most of the Euro Stoxx 600 sector subindices launched new week lower with biggest pullback experienced by miners and carmakers. On the other hand, travel and media companies are pushing moderately higher.

DE30 opened noticeably lower on Monday. The benchmark tested 12050 pts handle shortly after trading begun. The 33-period moving average can be found a notch above the market price at press time and may serve as a local, technical resistance level. In case this hurdle is breached during today’s trading the next area to watch could be the 12130-12150 pts zone. Source: xStation5

The European parliamentary elections coalition proposed by the French President Emmanuel Macron faces some opposition in his homeland. Namely, Macron’s opponent in the presidential elections, Marine Le Pen, claimed during a speech on Sunday that the European Union is a threat to Europe and is “seriously harming” it. Le Pen criticized Macron and Brussels over the migration policy and said that the EU elections could “change everything”. Politician also addressed representatives of the Austrian Freedom Party and the Italian League, who were present at the event, and told them that their parties are the ones that will fight to defend the European civilization. Having that in mind, in case Macron’s progressive coalition gains momentum we may see populists group up together to boost their chances in EU elections next year.

Major European equity indices after the first hour of trade:

• DAX (DE30): -0.55%

• FTSE 100 (UK100): -0.13%

• CAC 40 (FRA40): -0.27%

• IBEX (SPA35): +0.40%

• FTSE MIB (ITA40): +0.38%

Linde (LIN.DE) leads DAX laggards as another hurdle related to Praxair merger could be on the way. Source: Bloomberg

Company News

According to the Xinhua News Agency, BMW (BMW.DE) will recall almost 140,000 vehicles in China. The Chinese regulator claims that cars are defective with an issue in the air conditioning system being spotted that may increase the chance of fire. Almost two thirds of vehicles that will be recalled were produced in China while others were imported. Faulty vehicles were produced between 2005 and 2011.

Financial Times reported that the Deutsche Bank plans to move much more assets from London to Frankfurt due to Brexit than previously thought. As the Bank faced increased pressure from the European regulators over the size of its assets in the UK and how it can impact the company and financial system once Brexit occurs. The report says that the Bank may move as much as €450 billion of assets back to Germany. Apart from that, UBS Group (UBSG.CH), the Swiss banking behemoth, has also unveiled over the weekend that it will make Frankfurt its post-Brexit European hub.

Elsewhere, Linde (LIN.DE) is the worst performing stock from the DAX index today on the back of the report suggesting that the company may need to sell more assets to secure FTC clearance for its Praxair merger.