DE30 approaches 23.6% retracement of August-September upward move

• European stocks markets sink following declines on US and Asian stock exchanges

• Executives of Volkswagen (VOW1.DE) charged by German prosecutors

• Daimler (DAI.DE) fined over its role in Dieselgate scandal

Major stock market indices from the Old Continent launched Wednesday’s trading with a downward price gaps following steep declines seen during yesterday’s US session. Swiss and Polish equities underperformed the most in the first minutes of trade while Spanish and Portuguese shares were the most resilient.

DE30 was trying to break above the 12450 pts handle for a few days but ultimately failed to do so. A reversal occurred later on and the index dipped around 250 pts. An important support zone ranges in between 12130 and 12180 pts handles and it should be the first area to watch in case downward move continues. A point to note is that the upper limit of the aforementioned zone coincides with the 23.6% Fibo level of the August-September upward impulse. Having said that, bears may find it somewhat harder to break lower. Source: xStation5

Dieselgate keeps haunting German carmakers

German prosecutors charged two German carmakers yesterday. Charges are related to the infamous diesel scandal. Prosecutors claim that three executives of Volkswagen (VOW1.DE) - CEO Diess, Chairman Poetsch and ex-CEO Winterkorn - were too slow to inform shareholders about diesel-related findings. Lawyers of all three executives denied allegations. Company’s supervisory board will meet later today to discuss the situation. Apart from that, a fine of €870 million was imposed on Daimler for rigging vehicles. This settlement closes the Dieselgate case for Daimler in Germany. The company is still facing lawsuits in the United States. And those may lead to more fines. Both, Volkswagen and Daimler, experienced steep share price declines yesterday on the back of the news.

DAX members at 8:35 am BST. Note that stocks like Infineon (IFX.DE) and Wirecard (WDI.DE) are among top losers as risk-aversion hit tech sector particularly hard. Source: Bloomberg

Adidas (ADS.DE) was trading among DAX leaders just after the opening. The upbeat performance could be reasoned with solid earnings report released by its rival, Nike (NKE.DE). Nike reported better-than-expected results for the fiscal Q1 (ended 31 August) hinting that demand for sportswear remains strong in spite of deteriorating conditions in international trade. However, Adidas gave back all of the gains during the first hour of trading.

ThyssenKrupp (TKA.DE), the German industrial company, announced that the supervisory board recommended replacing current Chief Executive Officer, Guido Kerkhoff. The move is said to be triggered by a growing dissatisfaction of Kerkhoff’s performance. He took over as CEO in July 2018 and since then share price of ThyssenKrupp declined around 40% and triggered a withdrawal from the DAX index earlier this month.

Siemens (SIE.DE) received an upgrade at HSBC. The Bank raised recommendation for the stock from “hold” to “buy” and set price target at €120 against the previous target of €114.

ThyssenKrupp (TKA.DE) failed to break above the 200-session moving average (purple line) earlier in the month. A steady downward move was launched afterwards. The stock is testing 23.6% Fibo level of the latest upward bounce (€12.27). Note that this level halted downward move on Monday and in case such a story is repeated today, a short-term bottom may be formed. Source: xStation5