- European indices trade mostly lower
- DE30 is testing downward trendline
- Deutsche Bank (DBK.DE) stock retargets despite upbeat quarterly figures
Majority of European indices are trading lower on Wednesday, with DE30 being an exception as upbeat quarterly results from Deutsche Bank and Mercedes-Benz lifted investors' sentiment. On the other hand, the tech sector remained under pressure after Alphabet's earnings and revenues disappointed and Microsoft posted its weakest quarterly sales growth in five years. Also traders restrain themselves from taking more risk ahead of tomorrow’s ECB monetary policy decision. Markets expect interest rates to raise by 75 bps and will be looking for more guidance regarding its path towards quantitative tightening in a bid to bring down inflation, despite heightened recession risks.
DE30 finally managed to break above major resistance at 12950 pts, which coincides with 38.2% Fibonacci retracement of the downward wave launched in June 2022. Currently buyers are trying to push the index above the downward trendline. Should break higher occur, next resistance to watch lies at 13300 pts. On the other hand, if sellers manage to regain control, support at 12520 pts may be at risk. Source: xStation5
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Technology and real estate shares are the worst performers while materials, health care and financial gained, prompted by upbeat earnings reports. Source: Bloomberg
Company news:
- Deutsche Bank (DBK.DE) stock 0.70% despite better than expected quarterly results. The bank reported a net income of 1.115 billion euros ($1.11 billion) for the quarter. Refinitiv analysts expected a net profit of 827 million euros. Revenues rose 15% from a year ago, and hit 6.92 billion euros. Deutsche Bank also said it had further reduced its exposure to Russian credit over the same period.
Deutsche Bank (DBK.DE) stock launched at relief rally in recent days, however buyers failed to break above major resistance at €9.55, which coincides with 50.0% Fibonacci retracement of the upward wave started at the beginning of pandemic. If sellers manage to uphold control, downward move towards support at €8.35 may deepen. Source: xStation5
- Mercedes-Benz (MBG.DE) stock rose slightly on Wednesday as automaker now expects earnings to rise at least 15% this year, compared with a previous forecast of 5%-15% growth, after profits at its cars division almost tripled in the third quarter from pre-pandemic levels. Company said strong demand for luxury cars and cost savings offset the supply chain bottlenecks. Mercedes also withdraws from the Russian market and sell shares in its industrial and financial services subsidiaries to a local investor, becoming the latest carmaker to exit the country.
- BASF (BASF.DE) expects that the most of the planned lay-offs in Europe within the next few years, to be carried out through retirements and people moving to other jobs.
DAX biggest market movers. Source: Bloomberg
The most active stocks listed on the DAX index (DE30). Source: Bloomberg
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