DE40: DAX at important support ahead of ECB decision

• DE40 drops ahead of ECB decision
• Dollar climbs further after hawkish CPI reading
• Gerresheimer releases its Q1 results

General market situation:

The DE40 is losing nearly 0.6% and thus approaching the key support point set by the 200-period moving average (H4 interval). Worse sentiment is mainly the result of a strong dollar, which extends the gains after yesterday's CPI report. Moreover, investors are awaiting the ECB's interest rate decision today, which may also cast a dovish shadow on the EUR, thus strengthening the USD.

It is worth keeping a close eye on the markets at 1:15 pm BST (ECB decision) and 1:30 pm BST (PPI data from the US).

European companies traded during Thursday's trading session are mostly down at the moment. Source: xStation 5

Germany's benchmark DE40 is recording 0.5% declines during today's session. The main control level remains around 18155 points, which on the H4 interval was further reinforced by the 200-period exponential moving average (gold curve on the chart). Source: xStation 5

News:

Gerresheimer (GXI.DE) is down nearly 4.88% today despite reporting Q1 2024 results in line with expectations. The combination of worse sentiment on the Old Continent and the materialization of the expected results erects a technical correction on the company's shares. Below are the details of the report presented:

• Revenues €466.1 million, estimated €463.3 million
• Plastics and equipment revenue €258.4 million, estimated €245.3 million
• Adjusted Ebitda €80.9 million, estimated €81.3 million
• Plastics and equipment adjusted Ebitda €59.3 million, estimated €56.4 million
• Packaging glass adjusted Ebitda €34.8 million, estimated €37.2 million
• Advanced technologies adjusted loss Ebitda €5.1 million, estimated loss €2.64 million
• Other adjusted loss Ebitda €8.1 million, estimated loss €9.59 million
• Adjusted Ebitda margin 17.4%, estimated 17.6%
• Adjusted net income €23.0 million
• Adjusted earnings per share (EPS) €0.65, estimated €0.69
• Glass primary packaging revenue €208.4 million, estimated €216.2 million

ANNUAL FORECAST

• Expected organic revenue adjusted for foreign exchange +5% to +10%.
• Projected basic earnings per share (EPS) at constant exchange rates +8% to +12%.
• The company still expects adjusted Ebitda of €430 to €450 million, estimated: €441.6 million.

Automobile manufacturers BMW AG (BMW.DE) and Mercedes-Benz Group AG (MBG.DE), chemicals giant BASF (BAS.DE), drug and crop chemicals maker Bayer AG (BAYN. DE) and chipmaker Infineon Technologies AG (IFX.DE) are among seven companies in the Euro Stoxx 50 index that Bloomberg Intelligence calculates will cause a 7% decline in earnings per share for the index, excluding the energy sector.

"Germany's dependence on some key industries, particularly automotive, exposes it to cyclical demand pressures around the world." - Bloomberg analysts reported.

Source: Bloomberg Financial LP

Other news about individual companies included in the DAX index. Source: Bloomberg Financial LP

Analyst recommendations:

• Stifel downgraded its recommendation on shares of K+S (SDF.DE) to a "sell" rating. Target price at €12.50.
• Bankhaus Metzler raised its recommendation on shares of Nordex (NDX1.DE) to a "buy" rating. Target price at 14.90 euros.