DE40: European Markets under Pressure, Deutsche Telekom Launches Buyback

• European equities trade mixed, with France's FRA40 declining 0.43% while Poland's W20 advances 0.45%

• Airbus falls short of 2024 delivery target with approximately 760 aircraft despite strong December performance

• Deutsche Telekom launches first €550 million tranche of share buyback program, stock rises 0.55%

• German power prices turn negative for four hours as renewable energy supply surges, marking growing trend across Europe

• German Unemployment Rate: Actual 6.1% (Forecast 6.2%, Previous 6.1%)

General market situation: European markets are showing mixed performance, with most indices trading lower. The French FRA40 leads declines (-0.43%), followed by the Austrian AUT20 (-0.33%) and German DE40 (-0.12%). The Italian ITA40 and pan-European EU50 also trade lower (-0.11% and -0.08% respectively). On the positive side, the Polish W20 shows the strongest gains (+0.45%), followed by the Dutch NED25 (+0.33%) and Spanish SPA35 (+0.31%). The Swiss SUI20 (+0.13%) and UK's UK100 (+0.30%) are also trading higher.

Dax Returns by Sector. Source: Bloomberg Financial LP

Looking at the German DAX sector performance, Communication Services leads gains (+0.69%), followed by Financials (+0.45%) and Real Estate (+0.27%). Utilities (+0.10%) and Consumer Staples (+0.03%) are also trading in positive territory. On the downside, Information Technology shows the largest decline (-0.63%), followed by Materials (-0.46%) and Industrials (-0.37%). Consumer Discretionary (-0.14%) and Health Care (-0.03%) also trade lower. The aggregate DAX performance shows a modest decline of -0.10%, with market breadth negative as six out of ten sectors trade lower.

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

 

The German DE40 Index is consolidating, with the RSI indicating signs of bullish divergence, potentially signaling the easing of bearish momentum. Additionally, the MACD is tightening, suggesting a possible bullish crossover in the near future.

For bears, a retest of the October high at 19,783 could accelerate downward momentum. A decisive break below this level might pave the way for a retest of the early November high at 19,525, which is closely aligned with the 50-day SMA at 19,701, forming a critical support zone.

For bulls, the 78.6% Fibonacci retracement level at 20,189 serves as a key resistance. This level has proven significant in recent sessions and could either act as a launchpad for further bullish advances or signal the beginning of bearish divergence if rejected. Traders should watch these levels for clearer directional cues. Source: xStation

Corporate News:

• Airbus (AIR.DE) Misses 2024 Delivery Target Despite December Push - The planemaker delivered approximately 760 aircraft in 2024, falling short of its revised 770-unit goal despite a strong December performance of nearly 120 deliveries. The company had initially targeted 800 deliveries but lowered guidance in June due to supply chain bottlenecks. Analysts at Bloomberg Intelligence project 869 deliveries for 2025 amid strong demand for fuel-efficient models.

• Deutsche Telekom (DTE.DE) Launches Share Buyback Program - The German telecom giant announced plans to purchase shares worth up to €550 million between January 3 and April 4, representing approximately 18.85 million shares at current prices. This marks the first tranche of a previously announced €2 billion buyback program for 2025. Shares rose 0.55% to €29.33 following the news.

• German Power Prices Turn Negative Amid Renewable Surge - Power prices in Germany dipped below zero for four hours on Thursday as wind energy generation approached 40 gigawatts, outpacing demand. The country recorded 468 hours of negative prices in 2024, up 60% from the previous year, reflecting challenges in managing growing renewable capacity. Similar trends were observed across Europe, with France, UK, and Spain also experiencing increased instances of negative pricing.

• European Power Market Transformation Continues - The EU's renewable energy investment reached $110 billion in 2023, up 6% year-over-year, as the region accelerates its energy transition following reduced Russian gas flows. The shift has highlighted infrastructure challenges, particularly in battery storage capacity for solar power, impacting consumer benefit from lower day-ahead prices according to SEB Research.

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