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European stock markets trade higher
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DE30 tries to break above 13,600 pts resistance
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Bayer slumps as chances for favorable Roundup settlement shrink
European stock market indices are trading higher on Wednesday as recovery from recent declines continues. Majority of blue chips indices from Western Europe trade over 1% higher, with French CAC40 (FRA40) being top performer (+1.9%). German DAX (DE30) lags behind regional peers, trading 0.8% higher. Release of the US CPI report for April at 1:30 pm BST is a key point in today's calendar but its impact is more likely to be felt on FX market rather than equity markets.
Source: xStation5
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Create account Try a demo Download mobile app Download mobile appA recovery move on DE30 that could have been observed yesterday was halted at the 13,600 pts resistance. While index made a break above, it has quickly pulled back later on. Nevertheless, momentum of this pullback was weak and DE30 continues to trade in the 13,600 pts area. An attempt to launch an upward impulse from the area can be observed at press time. From a technical point of view, a move towards the upper limit of the downward channel in the 14,150 pts area looks to be the base case scenario for now. However, slightly below the upper limit one can find a 14,000 pts resistance, marked with the upper limit of the overbalance structure. In theory, a break above this hurdle would signal a reversal in short-term trend but given that the index is trading in a downward channel, a break above the upper limit of the channel would be needed to confirm trend reversal.
Company News
Allianz (ALV.DE) said that it will set aside an additional €1.9 billion to settle lawsuits and regulatory probes related to the implosion of its hedge funds 2 years ago. This adds to a €3.7 billion already set aside for settlements with investors and brings a total provision to €5.6 billion.
Shares of Bayer (BAYN.DE) are taking a hit today. Biden administration advised the US Supreme Court to reject Bayer's appeal in the California Roundup case. It was expected that a recommendation will be made to review the case and recommendation to reject makes it much less likely for Bayer to secure a favorable outcome.
Thyssenkrupp (TKA.DE) reported earnings for fiscal-Q2 2022 (calendar Q1 2022). Sales reached €10.60 billion (exp. €9.44 billion) while adjusted EBIT came in at €802 million (exp. €576 million). Company reported a net profit of €556 million, compared to a €199 million net loss a year ago. Thanks to a solid start of the year, the company now expects full year adjusted Ebit to reach at least €2 billion, up from €1.5-1.8 billion previously, and full-year net income to exceed €1 billion.
Bayer (BAYN.DE) is the worst performing DAX member today. Stock drops as chances for favorable settlement in Roundup cases are getting slimmer. Stock launched today's trading around 7% below yesterday's cash close but price regained some ground following the beginning of the session. The key to future moves is whether stock manages to climb back above the price zone at 38.2% retracement of recent upward impulse. Source: xStation5
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