DE30: European indices recover from daily lows

• European markets trade lower but off daily lows

• DE30 climbs back above 15,475 pts area

• Duerr surges on full-year forecast upgrade

European stock markets are trading lower on Tuesday, following another day of heavy sell-off in Asia, especially in China. Major indices from the Western Europe were trading over 1% lower but have managed to bounce off daily lows. Russian indices can be seen as outperformers as they are the only major ones from Europe to trade flat.

Source: xStation5

DE30 took a steep dive at the start of today's cash session in Europe. However, the index managed to bounce off the daily low near 50% retracement of the downward move launched in mid-July (15,415 pts). Index has later on climbed back above the mid-term support zone in the 15,475 pts area. While moods in Asia, especially China, are sour, bulls from Europe do not seem to give up. However, the longer the sell-off in China lasts, the more likely it is that spillover effects will intensify. This, along with tomorrow's FOMC meeting, are key near-term factors to watch for equity traders. Risks associated with spreading of the Delta coronavirus variant should also be included in the equation. Tokyo has reported a record number of new cases today and there is a risk that the Olympic Games turn out to be a super-spreader event. So far, governments around the world have refrained from reimposing harsh restrictions but it cannot be ruled out. In such a scenario, indices may find themselves under pressure but it seems unlikely that we will see declines of the same magnitude as during the pandemic panic sell-off in February and March 2020.

Company News

In spite of overall risk-off moods, Duerr (DUE.DE) is surging today. Stock is trading over 9% higher following the release of preliminary Q2 earnings. Company reported adjusted EBIT at €49.6 million, up from a €8.9 million EBIT loss in the year ago quarter. Preliminary sales are seen at €843 million, up from €772.6 million in Q2 2021. However, what surprised investors the most is a full-year forecast upgrade. Duerr said it expects full-year sales in €3.6-3.8 billion range, up from a previous forecast of €3.45-3.65 billion. Full-year order intake forecast was lifted from €3.6-3.9 billion to €4.0-4.2 billion.

According to a Reuters report, Vonovia (VNA.DE) is not giving up on the Deutsche Wohnen merger. The latest, third attempt to merge with Deutsche Wohnen is likely to fail as Vonovia failed to win the support of shareholders. However, management is reportedly preparing another offer that will be ready within weeks.

Duerr (DUE.DE) rallies over 9% today. Stock managed to break above the long-term resistance zone marked with the 50% retracement of the large downward move launched in late-October 2017. Shares are trading at 27-month high. The nearest resistance to watch can be found at €41.40 and is marked with previous price reactions. Source: xStation5