DE30 tests 12,500 pts after strong PMI readings

• French and German PMIs beat expectations

• DE30 clears 200-hour moving average

• Ex-CEO of Wirecard (WDI.DE) arrested

Stocks in Europe are trading higher being boosted by solid PMI readings from Germany and France. Major stock market indices from the Old Continent managed to recover from yesterday's decline and DE30 was even trading above 12,500 pts for a moment.

German PMIs still in contraction zone

Release of French PMIs triggered a jump in European equity markets. Every French PMI index climbed back above the expansion-contraction threshold at 50 pts. However, German indices released 15 minutes later were not as upbeat. Below are results:

• Manufacturing: 44.6 vs 42.5 expected (previous 36.6)

• Services: 45.8 vs 42.3 expected (previous 32.6 pts)

• Composite: 45.8 vs 44.4 expected (previous 32.3)

Both manufacturing and services sectors are still in contraction territory. One reason behind such a discrepancy between France and Germany is the fact that the former country started to ease Covid-19 restrictions earlier. Looking at the bright side, new orders began to expand.

DE30 finally made a break above the 200-hour moving average (Purple line) and resistance at 12,400 pts. The index tested resistance zone ranging around 78.6% retracement later on but failed to break higher so far. The aforementioned 12,400 pts is a short-term level to watch should the ongoing pullback deepen. Source: xStation5

Wirecard (WDI.DE) is staging a comeback today as the share price rises more than 15%. However, the situation around the company did not change as €1.9 billion is still missing. German prosecutors arrested ex-CEO Markus Braun and accused him of inflating sales volume. Arrest warrant was issued in order to prevent potential escape to Austria, Braun's home country. According to a Reuters report, an arrest warrant was also issued after Jan Marsalek, ex-COO and also Austrian.

Bloomberg reported an interesting story relating to Wirecard (WDI.DE). According to the report, Wirecard approached Deutsche Bank (DBK.DE) in 2019 with an idea of a merger. Bloomberg saw an analysis prepared by McKinsey that claimed such a merger would provide €6 billion in additional profits by 2025. However, German lender was reportedly quick to end initial talks with the payment processor.

German Finance Minister Olaf Scholz said that yesterday's talks with Lufthansa (LHA.DE) executives and top shareholders were "friendly". Government officials laid out their case behind the current shape of the bailout package and hope shareholders will understand. Shareholders are set to vote on a bailout deal on Thursday.

According to a Automobilwoche report, Daimler (DAI.DE) could be planning additional job cuts. Report claims that cuts could amount to 10,000 jobs and will be made over the course of the next five years. However, the company rejected the report saying that they have only communicated one number so far and that is €1.4 billion in cost savings.

DAX members at 10:05 am BST. Source: Bloomberg