DE30 struggles with resistance at 10,700 pts (Angol hír)

• Industrial production in Germany and France collapses

• DE30 struggles near 10,700 pts

• HeidelbergCement (HEI.DE) drops after dividend cut proposal

Stocks in Europe are trading higher on Thursday. However, scale of gains is quite limited and DAX bulls seem to struggle to push the index back above 10,700 pts. Index may require a trigger for "make or break" and today's jobless claims data (1:30 pm BST) could prove to be one. 

More grim data from Europe

Some hard data reports for March from European countries were released today in the morning. However, do not fool yourself - they are all bad. German industrial production dropped 9.2% MoM (Exp. -7.4% MoM) while French industrial output dropped 15.2% MoM (-12.4% MoM). Retail sales in Italy declined 20.5% MoM (exp.-14.9% MoM). However, stocks are trading higher hinting that markets may be fed up with negative news already. Today's upbeat sentiment is said to be triggered by better-than-expected trade data from China. However, details show that an increase in demand from ASEAN countries was responsible for solid exports results. Unfortunately, most of these exports are assumed to be one-offs and may not support data in the coming months. 

Source: xStation5

Following a big plunge at Monday's open, DE30 started to trade within an upward channel. However, the index broke below the lower limit of the channel yesterday, putting recovery under question. Taking a look at the index at lower frame (M30) shows that DE30 is facing significant resistance at 10,750 pts. A point to note is that 10,700 pts is acting as a ceiling so far today. Inability of pushing the index towards 10,750 pts may hint at bulls weakness and a bigger decline looming. First important support to watch ranges around 10,550 pts handle while the next one is the zone ranging below 10,250 pts. On the other hand, a break above the 10,750 pts could call for a test of the short-term resistance at 10,850 pts. Traders should stay on guard at 1:30 pm BST as US jobless claims data release may trigger additional volatility on DE30 as well.

DAX members at 10:20 am BST. Source: Bloomberg

Continental (CON.DE) released a detailed quarterly report today. Headline Q1 results were inline with preliminary figures announced by the company last week - EPS dropped 47.2% YoY, to €1.46, and revenue declined 10.1% YoY to €9.84 billion. The company said that April was the weakest month of the year and it sees some improvement in the coming months. Continental expects Q2 2020 to be the worst quarter of the year as it generates most of sales in Europe and the United States. Lockdowns are still in place in those regions.

Deutsche Bank (DBK.DE) announced that it has opened almost half of branches closed due to the coronavirus pandemic. Whether remaining branches open too will depend on German economy's reopening.

Members of the German governing coalition are still arguing over taking an equity stake in Lufthansa (LHA.DE). Let us recall that German government is mulling taking 25% stake in the company. Nevertheless, a deal is likely to be reached sooner or later and today's comments from German Economy Minister, Peter Altmaier, seem to confirm it. Altmaier said that he does not want German companies to be sold off cheaply to foreign investors and called to save Lufthansa as it makes up the core of the German economy. 

HeidelbergCement (HEI.DE) generated €3.93 billion in revenue in the first quarter of 2020 (-7.3% YoY). Operating EBITDA increased 3.3% YoY to €405 million. Net income at €60 million was flat year-over-year. Company's shares are trading lower because of dividend action - management proposed to lower the 2019 dividend to €0.60 per share from €2.20 per share.

Deutsche Bank (DBK.DE) broke above the resistance zone at €6.35 in the previous week. However, stock is pressured this week and has pulled back to the aforementioned zone to test it as a support. In case we see a break lower, decline could deepen towards the €5.90, where the lower limit of market geometry can be found. Source: xStation5