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European stock markets trade higher
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DE30 climbs back above 15,530 pts
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Siemens upgraded financial targets
In spite of a mixed session in Asia, European stock markets are trading higher on Thursday. Gains can be spotted all across the Old Continent with French and Spanish equities being outperformers. Russian indices are the only ones to trade lower today.
German IFO indices for June were released at 9:00 am BST. Market expected the Business Climate index to increase from 99.2 pts to 100.7 pts. However, actual data showed a bigger improvement with the index coming in at 101.8 pts. Expectations subindex jumped from 102.9 to 104.0 pts (exp. 103.6) while the Current Assessment subindex moved from 95.7 to 99.6 pts (exp. 97.9). Note that Expectations subindex reached the highest level since December 2010!
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Source: xStation5
DE30 dipped below the support area at 15,530 pts yesterday and tested 38.2% retracement of a recent upward impulse at 15,425 pts. However, index is recovering today with a strong upward move, support by better-than-expected IFO data. Cash index trades around 0.8% higher on the day and has managed to climb back above the 15,530 pts area. The 15,635 pts area remains a near-term resistance to watch. US GDP data set for release later today is unlikely to have a major impact on the markets as it will be the second revision. However, speeches from Fed members scheduled for today may have some impact.
Company News
Siemens (SIE.DE) upgraded financial targets. The company now expects annual revenue growth of 5-7% over its 3-5 year-long business cycle, up from previous 4-5%. Earnings per share are expected to grow by a high-single-digit percentage. Profit margin target for Digital Industries unit was held unchanged at 17-23% while profit margin target for Smart Infrastructure unit was boosted from 10-15% to 11-16%. Company also announced the first buyback programme since 2015. Siemens aims to purchase $3.6 billion worth of shares over a 5-year period, starting in 2022.
According to a Bloomberg report, Europcar is most likely to reject a takeover bid from Volkswagen (VOW1.DE) that valued the company at €2.2 billion. According to media reports, Volkswagen offered Europcar's shareholders to acquire the company at €0.44 per share.
Siemens Healthineers (SHL.DE) announced that it will buy back shares worth up to €170 million with purchases set to begin on June 28.
Siemens (SIE.DE) launched today's trading slightly higher, following the release of upgraded targets. However, stocks started to move lower and dropped from an area marked with 38.2% retracement (€137.20) to around €135.00. Stock tries to recover and attempts to break back above the resistance zone at €136.00. Source: xStation5
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