DE40: European stocks' declines also affect DAX index

• PPI for April lower than expected.  
• DAX with a decline. 
• Car manufacturers further under pressure from the Chinese market. 

During today's session, the DAX is trading in a nearly 0.5% correction. At its lowest point, the index touched support near 18641 pts, which has been the support of the quotations since early May. So far, any approach to this area has ended with a reversal and a return to growth. For now, it looks like the German stock market continues to wait for stronger signals from companies.

PPI data, which continue to linger in deflationary territory, were not enough today to push index valuations. The signal the market is waiting for may be tomorrow's Nvidia report. So far, the company has not only had a strong price-setting effect on U.S. indexes, but has also had a significant impact on European investor sentiment. 

Germany's PPI was -3.3% y/y in April. This is 0.1 p.p. lower than the expected -3.2%. Although prices rose slightly in m/m terms (0.2%), we can still speak of strengthening deflationary sentiment on the producer side. However, the data reading did not significantly affect the markets, and today's valuations of the German index show that investors' attention is focused on a different direction. 

Automobile manufacturers continue to weigh on the index's quotations. Faced with a potential deterioration in EU-China trade relations in terms of car sales, their quotations continue yesterday's declines. The worst performers are Mercedes-Benz (-0.63%) and BMW (-0.59%). 

DAX Companies' performance. Source: Bloomberg Finance L.P.

DAX index's contract (DE40) is currently traded near its short term support level between 18717-18736 pts. In previous sessions during May whenever it had reached those levels, we could see rebound coming back to growth. It is hard to predict whether today session will give opportunity to stronger gains, however probably tomorrow's Nvidia financial report might give enough strength for investors to push index back to higher quotation. On the other hand, worse than expected results might create a downward pressure. Source: xStation

Company news: 

• Airbus (AIR.DE) announced another order, this time for 14 helicopters, with a potential order increase of 7 more. Despite the increase in orders, we see bearish pressure on the company today perhaps due to the realization of gains from the previous session. Airbus is losing 0.6% today. 
• Redcare Pharmacy (RDC.DE) is one of the leaders of the declines in today's session. The pharmacy's shares are losing more than 11%, falling to their lowest levels since September 2023. The declines are partly the result of a negative recommendation from UBS bank, which believes that the company's potential from e-prescribing has already been factored into the price, and that the company's financial prospects are not a sufficient basis for its previous valuation.