DE40: Stabilization around the 100-day EMA; Watches of Switzerland reassures on the impact of tariffs on watches💡

European stock indices recorded moderate gains during Tuesday's trading session. Yesterday, Wall Street stocks fell after industrial production data signaled a slowdown in growth and weakening employment amid persistently high inflation, and 30-year bond yields rose. However, at the end of the session in the United States, investors appeared to be buying at lower prices.

DE40 contracts are up more than 0.2% today, while EU50 is adding 0.19%. Investors are reacting to the results of listed companies and awaiting tomorrow's ISM services data from the US. The macro calendar for the second half of the day will focus on the JOLTS report and durable goods orders.

Source: xStation

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

The German DE40 index is gaining 0.2% during today's session and is once again testing the support zones marked by the 100-day exponential moving average (purple curve on the chart). As long as the DE40 remains above these zones, the overall long-term upward trend remains sustainable. However, a sustained break above the aforementioned 100-day EMA, which previously weakened the medium-term upward trend, may prove crucial for this recovery. The RSI for the last 14 days is at its lowest level since June this year, which may indicate that the current pullback is already relatively large in historical terms. Source: xStation

Company news

Watches of Switzerland (WOSG.UK) announced that its results for the first half of the fiscal year will be in line with expectations thanks to strong demand in the US and a stable market for luxury watches and jewelry in the UK. The company does not expect increased US tariffs on Swiss watches to affect its results, as the brand's partners have built up adequate stocks and watch exports from Switzerland rose by 45% year-on-year in July. The company's shares rose by around 11% at the opening of trading following this announcement. The management confirmed the continuation of good results and growth in both key segments, the US and the UK, in line with the forecast presented in July 2025. Currently, the company's shares are gaining slightly over 8%.

Jefferies analysts have raised their recommendation for Prosus NV (PRX.NL) from "hold" to "buy," highlighting the credibility of the company's strategy and the successes of its management, especially under new CEO Fabricio Bloisi. The new target price is €65.50, which represents a potential increase of approximately 28% from the last price of around €52. The company's shares are up slightly above 1% today.

Aegon (AGN.NL) is selling a 6% stake in ASR Nederland, reducing its stake to approximately 24%, with the transaction valued at approximately €720 million. The sale includes 12.5 million shares, of which ASR will repurchase approximately 15% of the sold stake, allocating up to €150 million for this purpose. This move is in line with Aegon's strategy of withdrawing from the Dutch market and focusing on its US operations and transferring its legal registration to the US. The high price of ASR shares (up 26% this year) and strong investor demand demonstrated the attractiveness of the offer and the successful integration of the two companies.

Analysts' activities:

Grade increases:

• Adidas upgraded to "buy" by Jefferies; target price €220.
• BP upgraded to "neutral" by Morgan Stanley; target price 400 pence.
• Nokia upgraded to "outperform" by BNPP Exane; target price €4.30.
• Watches of Switzerland upgraded to "buy" by Deutsche Bank.

Grade reductions:

• Continental downgraded to "below average" by Bernstein; target price €66
• Equinor downgraded to "below average" by Morgan Stanley; target price NOK 230
• Puma downgraded to below average by JPMorgan; target price €16.
• Siemens downgraded to neutral by Grupo Santander; target price €233.70.
• Volvo downgraded to hold by Nordea.