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European stock market trade higher
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DE30 still trades near 14,180 pts support zone
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BASF drops on disappointing Q4 net result
European stock markets are trading higher today. Relief came yesterday with markets seeing Western sanctions on Russia as underwhelming. Aggression in Ukraine continues with reports of Kyiv being under siege. Fights are ongoing within the city already and gunfire was reported in a government district. NATO is set to hold a virtual summit on Ukraine today at 2:00 pm GMT but Joe Biden has already said that neither US, nor NATO troops will be deployed to Ukraine.
Source: xStation5
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Open account Try demo Download mobile app Download mobile appGlobal stock indices and index futures recovered a bulk of yesterday's losses after sanctions on Russia announced by the US were seen as underwhelming. Blue-chips indices from all across Europe are trading higher today but still short of pre-invasion levels. Taking a look at DE30 from a technical point of view, we can see that yesterday's panic sell-off was halted at the 50% retracement of the upward move launched in November 2020. Index recovered part of losses but continues to trade near an important mid-term support zone ranging below 14,180 pts. This zone is also marked with the lower limit of the Overbalance structure therefore a downside breakout could hint that the main trend is about to reverse to bearish.
Company News
BASF (BAS.DE) reported a 15.2% YoY drop in Q4 2021 net profit to €898 million (exp. €969 million). Sales were 24% YoY higher at €19.78 billion (exp. €18.44 billion), with sales volumes up 11% and sales prices up 25%. According to the company, rising natural gas prices have resulted in a negative hit to earnings of around €800 million in Q4 2021. BASF said that it will continue to boost pricing of its products in order to offset higher raw material and energy prices.
Volkswagen (VOW1.DE) and Porsche Automobil Holding (PAH3.DE) are trading higher today. On one hand, it is a result of an overall improvement in moods. On the other hand, it is also a result of company-specific news. Namely, both companies said that in spite of current market volatility, they have no plans to shelf an IPO of the Porsche brand. CFO of Volkswagen said, however, that an IPO could happen in Q4 at earliest.
In spite of an overall improvement in moods on the European stock markets, BASF (BAS.DE) is trading lower after disappointing earnings release. Company reported a drop in Q4 net income on the back of rising material and energy prices. Taking a look at the chart, we can see that the stock is currently making a test of the €58.00 support zone. Source: xStation5
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