DE30: Wirecard extends sell-off after COO suspension

• European stocks post moderate gains

• DE30 near 200-hour moving average once again

• Wirecard (WDI.DE) deepens massive sell-off

Stock indices in Europe are posting moderate gains on the final trading day of the week. Most of the major benchmarks from the Old Continent gains between 0.5 and 1%. European Council is holding a virtual meeting today to discuss the EU recovery fund. Discussions are expected to finish in the afternoon. However, a decision on the fund is not expected until July therefore today's meeting is likely to be a non-event for markets.

Source: xStation5

DE30 repeats its recent playbook today - a test of 200-session moving average ahead of European cash session open and a pullback after the session started. German stock index seesaws between the aforementioned moving average (12,365 pts) and 50-hour moving average (12,315 pts). With lack of any big data releases or events scheduled for today, DE30 may continue to swing in this narrow 50 pts range for the time being. Break below or above any of those moving averages could be seen as a short-term trading signal. In case of a break lower, traders should look towards 12,150 pts handle as a potential support. This level is marked with previous price reactions and 200-session moving average (D1 interval). Nevertheless, as the post-pandemic recovery rally slowed, markets seem to be looking for a catalyst for the next big move and caution is advised.

DAX members at 9:49 am BST. Source: Bloomberg

Wirecard (WDI.DE) suffered a massive 62% slump yesterday. Troubles are far from over and share price takes another 40% dive today. Wirecard suspended Chief Operating Officer after he was unable to locate €1.9 billion in two Asian banks. There is no certainty that funds will ever be recovered but Wirecard says that it stays in contact with auditor, trustees and banks. Nevertheless, more and more stakeholders in Wirecard say that personal changes at the company are long overdue and should be made immediately amid the ongoing crisis.

Brussels Times reports that Deutsche Lufthansa (LHA.DE) may allow its Belgian subsidiary, Belgian Airlines, to go bankrupt. Newspaper claims that such a decision could be made in case Lufthansa fails to secure a bailout for the Belgian government.

Deutsche Post (DPW.DE) said that the coronavirus pandemic caused its reliance on Amazon (AMZN.US) to shrink. The company said the crisis caused a rise in parcel shipments for other customers and that it expects this trend to continue in the second half of the year. Deutsche Post also expects to bear its own assumption of 5% volume growth in German market this year and 2% in the global market.

Martin Brudermueller, CEO of BASF (BAS.DE), said that he is aware his company may be a target of hostile takeover or an action from an activist investor. Executive said that the company is prepared to counter such situations.

BASF (BAS.DE) is pulling back today. The company painted a lower high yesterday and began another leg lower. Continuation of the downward move will be conditioned on reaction to the support zone ranging below €38.2% retracement. Failure to break below it would see a double bottom pattern surface on the chart and could herald a return to post-pandemic highs. Source: xStation5