DE30: European equities try to recover on PMI beats

• European markets open lower on Friday

• DE30 tries to break back above 13650 pts handle

• Allianz (ALV.DE) gains after 2019 earnings report release

European markets opened lower on Friday following a poor session in Asia-Pacific region. However, indices began to recover after the release of better than expected PMI data from France and Germany. Nevertheless, majority of the European blue chip indices still trade below yesterday’s closing prices.

Source: xStation5

DE30 deepened drop over the night and tested the lower limit of the Overbalance structure at 13600 pts on Friday morning. Recovery started after the release of German PMI data and saw the index test 200-hour moving average at 13675 pts (purple line). While much of this gain was erased before the first trading hour finished, DE30 continues to move higher in the next hours. The index is testing the 13650 pts resistance level at press time and in case it breaks above it, another test of the 200-hour moving average may be on the cards. With no European data left to be released today, the index may have to wait for additional volatility until the US session opens.

DAX members at 9:55 am GMT. Source: Bloomberg

Ralf Brandstatter, Chief Operating Officer of Volkswagen (VOW1.DE), said that coronavirus outbreak has halted production at 33% of company’s plants in China. Over 50% of Volkswagen’s total production came from China in 2019. The executive said that the company is closely monitoring supply chains disruptions but ensured that it is covered in parts.

Allianz (ALV.DE) reported full-year earnings for 2019 today. The German company generated revenue of €142.4 billion, easily beating median estimate of €137.37 billion. Operating profit of €11.86 billion was 1.3% higher than expected while net income stood at €7.91 billion (exp. 7.84 billion). The company announced a new buyback programme. The German insurer plans to buy as much as €1.5 billion of shares between March and December. The company decided to return cash to shareholders as it was unable to find big and promising deals.

MTU Aero Engines (MTX.DE) can be found among DAX top laggards today. The drop is ascribed to a report of Warburg analysts, in which they point to the high significance of the company's maintenance plant in Zhuhai, China. The plant represents around 6% of company’s pretax profit and is mainly being used by Chinese airlines.

Infineon Technologies (IFX.DE) said it plans to become a carbon-neutral company by 2030. CO2 emissions are to be cut by 70% by 2025.

Infineon (IFX.DE) dipped into the support zone at €21.20. The stock tested 50-session moving average (green line) at the beginning of the cash session but managed to recover slightly. Today’s close may be crucial for the company as closing below the aforementioned zone could encourage bears to sell more. Source: xStation5