Summary
- European stocks rise ahead of Jackson Hole meeting
- DAX (DE30) continues to trade below important price zone
- Kloeckner (KCO.DE) surges on merger rumours, Thyssenkrupp (TKA.DE) leads DAX advance
European stock markets edge higher at the beginning of the Friday’s session. Gains can be spotted all across the Old Continent with Russian stocks being the sole underperformers. Polish WIG20 (W20) gains the most followed by the UK FTSE 100 (UK100). IT stocks, miners and real estate companies lead advance of the Euro Stoxx 600 index.
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Price zone ranging above the 11800 pts handle holds firm and keeps fending off DE30 bulls. German index clearly lacks catalyst for a break higher. Central bankers’ meeting in Jackson Hole could be such a catalyst. Jerome Powell’s speech at 3:00 pm BST may trigger large moves across FX and stock markets therefore traders should stay on guard. Source: xStation5
Thyssenkrupp to pursue another steel merger?
Thyssenkrupp (TKA.DE) can be found among the best performing DAX stocks on the final trading session of the week. According to the Handelsblatt report, the German industrial company is in advanced talks over merging its steel unit with Kloeckner (KCO.DE). Such a tie-up would create an all-German steel giant. Let us recall that the European Commission recently barred Thyssenkrupp from merging with Tata Steel. Apart from Kloeckner, Thyssenkrupp is also said to explore merging with Salzgitter (SZG.DE) as an alternative. According to the newspaper, takeover could be partially financed with money Thyssenkrupp receives from IPO of its elevator unit. Kloeckner shares are making double-digit gains on the news.
Thyssenkrupp (TKA.DE) leads DAX advance on Friday morning. Source: Bloomberg
Other company news
Earlier this week we wrote that Commerzbank may reduce the number of the German retail branches by as much as 100-200. Börsen-Zeitung, the German financial daily, reported that job cuts are likely to accompany closures. According to the newspaper, the Bank may decide to slash headcount by anywhere from 1800 to 2500 jobs. The decision on the matter is planned to be made on the Board meeting in September.
Deutsche Bank (DBK.DE) reached a settlement with the US Securities and Exchanges Commission and will pay $16.2 million to settle charges. The US regulator accused the German lender of hiring relatives of government officials in order to get more favourable rulings. Such employees often bypassed recruitment process and were not required to prove their expertise. In a statement SEC said that the German lender cooperated along the investigation, what resulted in relatively small settlement.
Among top moving stocks from the DAX index one can also find SAP (SAP.DE). The German company is benefiting from the improved sentiment towards the software stocks. Sentiment was boosted after Salesforce, the US software company, boosted revenue guidance yesterday. Forecasts exceeded analysts’ expectations and hinted at improved situation in the sector.
Thyssenkrupp (TKA.DE) has been trading in a downward trend for the past year and a half. Shares bounced higher this week and are eyeing a test of the price zone ranging above the €11 handle. Note that the downward sloping trendline and the 50-session moving average can be found slightly above it therefore bulls may have a hard time breaking higher. Source: xStation5
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