- European indices drop
- DE40 break below the 16,800 pts support zone
- Hapag-Lloyd gains as Red Sea transit remains dangerous
European stock markets are trading lower on Wednesday. This comes after a downbeat trading during the Asia-Pacific session earlier today and during the Wall Street session yesterday. Major blue chips indices from Western Europe trade 0.5-1.2% lower at press time, with French CAC40 (FRA40) being a top laggard. German DAX drops around 0.8%.
German unemployment rate for December was announced at 8:55 am GMT today. Report was expected to show unemployment rate in Europe's biggest economy staying unchanged at 5.9% and actual data matched those expectations. As the data came in-line with expectations, there was no major reaction on the markets.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
DAX futures (DE40) managed to halt yesterday's slump at the 16,800 pts support zone and started to recover later on. However, recovery move failed to gain momentum and a double top was painted in the 16,935 pts area, which was followed by another slump. Index made another test of the 16,800 pts area and this time it was successful. Declines continued and DE40 tested the 16,750 pts support zone, that acts as the lower limit of a month-long trading range. A break below this hurdle could pave the way for a deeper decline, with 16,500 pts area being the textbook target of the downside breakout from the trading range.
Company News
Hapag-Lloyd (HLAG.DE) trades over 3% higher on the day. Stock was gaining over 5% earlier today but has pared part of the gains. This comes as Maersk, world's second-largest container shipping company, decided to pause transits through the Red Sea in response to another Houthi attack on its vessels. Hapag-Lloyd decided to continue to avoid Red Sea routes. Shipping companies diverting their vessels via Cape of Good Hope, an around-40% longer route, create risk of freight rates going up, and shares of shipping companies are positively correlated with freight rate levels.
German-listed Tesla shares (TSLA.DE) are trading lower today, extending a downbeat streak as company's dominant position in EV sector looks to be under question. While Tesla delivered around 484.5 thousand EVs in the October - December 2023 period, Chinese company BYD delivered around 526.5 thousand EVs in the same period.
Airbus (AIR.DE) confirmed a Financial Times report that it has placed an offer for the cybersecurity and data unit of Atos, a French software company. Atos said that Airbus offered €1.5-1.8 billion for the unit. Talks are said to be in early stages, and Atos said that it has also received interest for the unit from another party, which Financial Times identified as Thales, French company developing electrical systems for aerospace and defense industry.
Hapag-Lloyd (HLAG.DE) is trading higher today, but off the daily highs. Stock gains on the expectations that freight rates will rise as shipping companies divert vessels via Cape of Good Hope to avoid dangerous Red Sea. Hapag-Lloyd shares trade around 40% above mid-December lows but failed to break above the post-Christmas local high in the €147 area. Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
