DE30 tests limits of the short-term trading range

• Majority of the European indices trade higher at the beginning of Thursday’s session

• DE30 tests limits of the 12895-12935 pts range at the beginning of cash session

• Bayer (BAYN.DE) settles lawsuit concerning blockbuster drug Xarelto

European stock market indices opened higher on Thursday following an upbeat session on Wall Street. However, stocks from the UK, Spain and Poland are trading lower at the top of the first hour of the session. Biggest gains can be spotted in Italy, Russia and Portugal.

Source: xStation5

DE30 formed a short-term ceiling above the 12935 pts handle. The index made another failed attempt of break higher at the beginning of today’s cash session. The downward move that followed was halted at the 12895 pts handle, the earlier short-term swing level. The index may be bound to trade within the range 12895-12935 pts today, in case no major news are announced. Should the index break above the aforementioned resistance, attention will shift to the YTD high at 12980 pts. Additional support levels to watch are localized at 12875 and 12745 pts (lower limit of the Overbalance structure). One should keep in mind that today’s release of the European CPI data should not have a major impact on equity indices.

DAX members at 8:40 am GMT. Source: Bloomberg

Bayer (BAYN.DE) is trading among DAX leaders today after settlement of a lawsuit regarding blockbuster drug, Xarelto. It was ruled that Bayer and Johnson & Johnson (JNJ.US) hold a valid patent for the drug and another drug maker involved in the case - Mylan - infringed. During the first nine months of 2019, Xarelto generated revenue of around €3 billion for Bayer and $1.7 billion for Johnson & Johnson.

Zalando (ZAL.DE) surprised investors with its Q3 earnings. The online retailer was expected to report an EBIT loss of €0.11 million but reported a profit of €6.3 million. However, net income was negative at €13.6 million. Revenue at €1.52 billion was 1.3% higher than expected. Nevertheless, the German company decided to leave full-year EBIT guidance unchanged at €175-225 million.

Delivery Hero (DHER.DE) is trading higher today after raising full year revenue forecast. The company raised guidance to €1.44-1.48 billion from €1.3-1.4 billion. The company also hinted that full-year EBITDA loss will be in the low end of the previous guidance of €370-420 million. The decision came after the company reported strong revenue and orders for the third quarter.

Share price of Zalando (ZAL.DE) declined over 50% in the second half of 2018. However, the stock managed to recover almost completely in 2019. Zalando launched today’s trading little changed but declined significantly as investors were disappointed with lack of EBIT guidance upgrade. The stock is trying to stay above the important support at 61.8% Fibo level of 2018’s decline (€38.95). Source: xStation5