DE40: Dax continues upward movement, BMW gains

• German DAX remain in the ATH zone

• BMW shares rose 1.4% after Jefferies joined UBS in favoring the automaker over Mercedes-Benz 
• European Central Bank is expected to implement faster interest rate cuts than previously anticipated, according to a Bloomberg survey.

General market situation: European markets are showing broadly positive performance today, led by the French FRA40 (+1.21%) and Italian ITA40 (+0.74%). The pan-European EU50 is up +0.59%, while the Austrian AUT20 and German DE40 have gained +0.42% and +0.27% respectively. The Swiss SUI20 and Dutch NED25 are showing modest gains of +0.14% and +0.06%, while the UK's UK100 is the only major market in negative territory (-0.11%).

Dax Returns by Sector. Source: Bloomberg Financial LP

Looking at the German DAX sector performance, the market shows a mixed picture with seven sectors posting gains and four declining. Real Estate leads the advances (+1.66%), followed by Utilities (+1.16%) and Consumer Staples (+0.62%). Consumer Discretionary (+0.51%), Health Care (+0.47%), and Communication Services (+0.13%) show moderate gains, while Materials (+0.11%) posts a slight increase. On the negative side, Industrials (-0.10%), Financials (-0.39%), and Information Technology (-0.71%) are declining. The aggregate DAX performance shows a decline of -0.08%, with market breadth indicating a mixed trading session despite the majority of sectors being in positive territory.

Volatility is currently observed in the broader European market. Source: xStation

The German DE40 Index is trading at its all-time high, supported by strong bullish momentum. The RSI is in the overbought territory, while the MACD continues to expand, nearing overbought levels. For bears to regain control, the October high at 19,783 would need to be retested. A break below this level could lead to a retest of the early November high at 19,525, which aligns closely with the 50-day SMA at 19,476, providing a critical support zone. Source: xStation

News

• Munich Re (MUV2.DE) and Hannover Re (HNR1.DE) shares moved in opposite directions following Morgan Stanley's sector outlook revision. Hannover Re gained 1.1% after being upgraded to "overweight," while Munich Re dropped 1% after being downgraded to "neutral." Analyst Ismael Dabo cited Hannover Re's stronger positioning for uncertain market conditions in 2025, despite expectations of solid industry fundamentals in the near term.
• BMW (BMW.DE) shares rose 1.4% after Jefferies joined UBS in favoring the automaker over Mercedes-Benz (MBG.DE). Analyst Philippe Houchois highlighted BMW's superior risk profile in terms of growth, customs prospects, and CO2 compliance, noting that the company's spending had peaked this year while Mercedes-Benz faces repositioning challenges.
• Volkswagen (VOW3.DE) CEO Oliver Blume warned staff of urgent cost-cutting measures needed amid intense competition and high labor costs. The announcement comes as nearly 100,000 workers staged walkouts across nine German factories in response to proposed 10% pay cuts and potential factory closures. Workers' council chief Daniela Cavallo has proposed alternative measures to save €1.5 billion while avoiding layoffs.
• Siemens Energy (ENR.DE) received a boost from JP Morgan, which maintained its "Neutral" rating while raising the price target to €44 from €38.70. The adjustment comes as analyst Andrew Wilson updated his valuation models for the energy technology company.
• European Central Bank is expected to implement faster interest rate cuts than previously anticipated, according to a Bloomberg survey. Analysts predict quarter-point reductions at each policy meeting through June 2025, targeting a 2% deposit rate. The shift reflects growing concerns about economic weakness in the eurozone and mounting political uncertainties in Germany and France.

Other news coming from individual DAX index companies. Source: Bloomberg Financial LP