DE30: European equities add to previous gains

Summary:

• Final Brexit vote in the UK parliament scheduled on 11 December

• DAX (DE30 on xStation5) fails to climb back above the 11400 pts

• Infineon (IFX.DE) announces cooperation with Norwegian IDEX Biometrics

Almost every European blue chips index opened higher on Tuesday following gains seen on Wall Street and during Asian session. Russian equities gained the most in the first minutes of trade while stocks in Italy and Spain were underperforming. Utilities and personal goods companies led gains while miners and travel stocks took the biggest step back at the beginning of Tuesday’s session.

DE30 (DAX futures underlying) opened lower today following steep advance yesterday. However, the benchmark rushed higher at the beginning of today’s session. Nevertheless, the bull run was halted above the 11400 pts handle and the index pulled back beneath it. In case bears began to dominate a decline towards the previous lows around 11050 pts cannot be ruled out. Source: xStation5

The final Brexit vote in the British parliament will take place on 11 December following five days of debate over the proposed agreement. It means that the Prime Minister Theresa May has just two weeks to convince divided House of Commons to back her and let the United Kingdom departure from the EU structures in an orderly fashion. However, it seems that there is still a lot of work to do. May faces dissatisfaction of not only opposition parties but also her own. Some Conservative lawmakers already announced they do not like the deal and few members of the Northern Irish DUP, a party that Conservatives rely on when it comes to having majority in parliament, said they will vote against it. Moreover, dissatisfaction can be also seen elsewhere. Namely, the US President Donald Trump said on Monday that the proposed agreement could seriously hamper UK-US trade. With odds being clearly against PM May and her deal, GBP may be much more sensitive to any kind of news in the next two weeks. It is hard to assess what will happen in case the parliament does not approve the deal but given that the EU is unlikely to renegotiate the terms of the deal one cannot rule out the possibility of chaotic no-deal Brexit. Debates in the British parliament over the deal will begin on 4 December.

Major European stock indices after the first hour of trade:

• DAX (DE30): +0.01%

• FTSE 100 (UK100): -0.17%

• CAC40 (FRA40): -0.10%

• FTSE MIB (ITA40): +0.04%

• IBEX (SPA35): +0.48%

Fresenius Medical (FME.DE) gains following upbeat analyst action. Source: Bloomberg

Company News

Fresenius Medical (FME.DE) is one of the best performing DAX stocks on Tuesday morning. The company was upgraded at Bankhaus Lampe from “hold’ to “buy”. The one-year price target was set at €82. The Bank said that market overreacted guidance revision in October creating a potential investment opportunity. Moreover, Bank’s analyst sees positive impact of NxStage acquisition.

Infineon Technologies (IFX.DE) announced today that it will begin to cooperate with the Norwegian IDEX Biometrics on developing biometric card solutions. IDEX Biometrics is leading provider of advanced fingerprint identification solutions. The two companies will work at more secure credit card solutions. Nevertheless, despite this rather promising cooperation announcement Infineon is trading among DAX’s biggest laggards.