DE40: Return of positive sentiment to the Old Continent

European equity markets recorded significant gains today, despite the ongoing political crisis in France, which continues to create uncertainty among investors. The FRA 40 index is up by over 1%, reaching a monthly high, demonstrating that despite political tensions, investors remain resilient. The British UK100 index also rose by around 0.8%, while the German DE40 increased by nearly 0.7%, continuing the positive sentiment across the Old Continent.

The political situation in France remains tense, and the crisis may impact the country’s economic stability, causing caution in the markets. However, despite these concerns, European stocks maintain an upward trend, supported by strong financial results from key companies and investors’ expectations of further central bank actions, particularly in monetary policy.

Investors are closely watching decisions by the US Federal Reserve and other major central banks, which could have a significant impact on global financial markets. Despite the uncertainty stemming from the political crisis, European stock exchanges today demonstrate their ability to effectively respond to volatility and maintain positive sentiment.

Source: xStation

Current volatility observed in the broader European market. Source: xStation

The DAX has been rising in recent sessions and is decisively breaking through key resistance levels, confirming its strength. The index is currently above the 50-day and 100-day exponential moving averages, which serve as important technical support levels. Maintaining a position above these averages is especially important, as it provides a solid base for further gains. If the DAX sustains this momentum and remains above these levels, it could signal the continuation of a strong upward trend and further increases.

Source: xStation

Company News:

BMW (BMW.DE) shares fell by more than 7% after the company lowered its profit forecast for 2025. The decline is mainly due to weaker sales in the Chinese market, higher costs related to tariffs, and delays in tariff refunds from US and German authorities, which are now expected only in 2026.

ASML (ASML.NL) shares dropped over 4% following calls from some US politicians to expand the ban on sales of chip manufacturing equipment to China. Washington, along with its allies, is considering introducing stricter restrictions, negatively impacting the company’s stock.

Similarly, ASM International (ASM.NL) shares lost about 1.5% after reports of a bipartisan investigation revealed that regulatory differences in the US, Japan, and the Netherlands allowed non-US manufacturers to sell chip production equipment to Chinese firms, which US companies were prohibited from selling to.

Puma (PUM.DE) shares gained nearly 1% after Bank of America upgraded its recommendation from “sell” to “neutral.” BofA analysts noted that following earlier significant price drops, the company’s current valuation already reflects many risk factors, limiting potential for further declines. The upgrade indicates a possible stabilization of the company’s situation, although challenges related to business transformation and strong competition in the sportswear sector remain.