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Stocks in Europe retest recent highs
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DE30 fails to break above Tuesday's high
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Airbus (AIR.DE) to slash airplane production by a third
Stocks in Europe are trading higher on Thursday. However, it should be noted that after an early rally, pullback started. Investors are waiting for big events scheduled for the later part of the day, like OPEC+ and Eurogroup meetings. Travel stocks lead advance in Europe while telecoms lag the most.
Source: xStation5
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Create account Try a demo Download mobile app Download mobile appDE30 climbs above the 10,400 pts mark today. The index even managed to break above the 10,500 pts but halted upward move after a test of Tuesday's high at 10,565 pts. Nevertheless, the index trades just slightly off the daily high and continuation of the upward move cannot be ruled out in the later part of the session. However, there are a few risk events to keep in mind while trading today. Statements from Eurogroup (start at 4:00 pm BST) and OPEC+ meetings (start at 3:00 pm BST) may trigger big moves. Meanwhile, some short-term volatility may be provided by the US data (1:30 pm BST - jobless claims, 3:00 pm BST - Michigan consumer sentiment). Major resistance can be found at 50% retracement of the February-March drop (10,900 pts). Area in between 10,050 pts and 38.2% retracement is the near-term support.
DAX members at 9:38 am BST. Source: Bloomberg
SAP (SAP.DE) released preliminary results for Q1 2020. The German software company saw a 31% YoY drop in software revenue. The company expects total revenue for the quarter to fall in the €27.8-28.5 billion range, down from previous forecast of €29.7 billion. SAP said that the coronavirus pandemic has derailed many businesses and caused postponement of many projects.
Airbus (AIR.DE) announced that it will slash production of airplanes. Decision is reasoned with the coronavirus outbreak that wreaked havoc on the aviation industry. Airbus plans to produce 48 planes per month from A320, A330 and A350 programmes. Earlier the company planned to produce 880 planes during the year, or 73 per month.
Infineon (IFX.DE) said that it is also trying to play its role in tackling the coronavirus pandemic. The German company said that it has so far supplied 38 million semiconductor chips for production of medical ventilators. The company also said that given the current situation it is focusing on making such chips available on notice.
European Union imposed tariffs on stainless-steel imports from China, Indonesia and Taiwan. Tariffs are as high as 18.9% in some cases. Aim of the move was to curb competition for EU producers, like for example ThyssenKrupp (TKA.DE).
Analyst actions
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Deutsche Wohnen (DWNI.DE) cut to "reduce" at HSBC. Price target set at €30
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Vonovia (VNA.DE) cut to "hold" at HSBC. Price target set at €48
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Adidas (ADS.DE) raised to "buy" at HSBC. Price target set at €280
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Puma (PUM.DE) raised to :buy" at HSBC. Price target set at €67
Airbus (AIR.DE) trades higher today but further upside seems threatened. The stock started to pull back after testing 200-hour moving average (purple line, €62.70 area). Near-term resistance can be found at the €60.00 swing level. However, taking a look at the bigger picture, Airbus is trading within a range limited by support at €50 and resistance at 23.6% Fibo level (€69 area). Source: xStation5
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