DE30 jumps to 16-month high after solid French PMIs

• European indices move higher after upbeat French PMIs

• DE30 painted a fresh 16-month high

• Daimler (DAI.DE) surges on solid Q3 earnings report

Trading in Europe started in upbeat moods on Thursday with majority of main indices opening higher. Gains were extended after the release of the French PMIs that came in above estimates. Shares from the United Kingdom and the Netherlands gain the most while Polish WIG20 (W20) is the only European index to still lag near yesterday’s closing price.

Source: xStation5

The German DE30 (DAX futures underlying) jumped at the beginning of the European session. Better-than-expected PMI indices from France were the reason behind this jump. The index climbed to the highest level since mid-June 2018 but pulled back from there once German PMIs came slightly below expectations. Nevertheless, upward momentum on DE30 market is solid and the index continues to smash through subsequent resistance levels. Today’s upbeat moods pushed the index above the level of a local peak from the turn of July and August 2018. The closest level for bulls to watch is marked with a double top pattern from May-June 2018 (13160 pts). Traders should keep in mind that while today’s ECB meeting is likely to be a non-event, some short-term price swings could occur during the conference (start at 1:30 pm BST). Should moods turn sour, DE30 could look to test the 12825 pts handle as a support.

DAX members at 8:55 am BST. Source: Bloomberg

Daimler (DAI.DE) can be found among DAX leaders at the beginning of Thursday’s session. The German carmaker released earnings report for Q3 before the session open and it was quite solid. Revenue increased 7.7% YoY to €43.3 billion while net profit increased around 3% YoY to €1.813 billion. Sales of passenger cars and commercial vehicles increased to 839.3k, up 6% against prior year results. R&D spending reached €2.5 billion in Q3 2019, up from €2.4 billion in the previous year. 

BASF (BAS.DE) is another DAX member that trades higher today. Reasons are the same as for Daimler - solid earnings report for Q3. The German chemical company reported revenue of €15.23 billion, higher than expected €14.9 billion. Adjusted EBIT for the third quarter stood at €1.12 billion while market expected €1.06 billion. The company said that the ongoing Sino-US trade war causes its prospects to deteriorate. However, recent purchase of agriculture unit from Bayer (BAYN.DE) helped offset this weakness in July-September period.

Among DAX top laggards, one can find Deutsche Telekom (DTE.DE). The German telecom is trading lower following a downgrade it received at Citi. Recommendation for the stock was lowered to “neutral” and price target was set at €17.50. 

Daimler (DAI.DE) surges thanks to the solid Q3 earnings report. Share price is approaching the resistance zone ranging around the 38.2% Fibo level of the downward move started in January 2018. In case the bulls manage to smash this resistance, attention will shift to the €55.80 handle - the upper limit of the Overbalance structure. Source: xStation5