DE30 bounces off 14,000 pts mark and tests 50% retracement

11:39 AM 21 December 2022
  • European stock market indices trade higher

  • DE30 tests 50% retracement near 14,060 pts

  • Aurubis cancels dividend policy, share swing wildly

European stock markets are trading higher with major blue chips indices from Western Europe gaining 0.6-1.1%. DAX futures trade around 0.8% higher on the day. Situation on the global markets have calmed since BoJ surprised investors with a hawkish pivot yesterday but JPY held onto most of yesterday's gains. 

Source: xStation5

Just as we have hinted in our DE30 analysis yesterday, the German index managed to paint a bullish candlestick pattern in the 14,000 pts area and defend the lower limit of a local market geometry. Bulls remain in control with the index extending gains to 14,060 pts today. Note that 50% retracement of the downward impulse launched in late-2021 can be found near 14,060 pts mark and a break above would brighten outlook for the bulls further. In case the recovery move continues and index continues to recover from recent losses, the first target for buyers could be resistance zone marked with 61.8% retracement (14,600 pts area).

Company News

Adidas (ADS.DE) is one of the best performing DAX members today, following release of earnings by its US peer Nike. Nike gained 13% in US after-hours trading after reporting a 13% YoY increase in global sales, to $13.3 billion, for the quarter ended in November 2022. (exp. $12.6 billion). Solid showing of a US apparel company boosted sentiment for the whole sector in Europe with Adidas shares gaining over 3% while Puma (PUM.DE) trades around 8% higher.

According to a Bloomberg report, Deutsche Bank (DBK.DE) is considering giving a 4% salary hike to some of its top earning employees in dealmaking, in an attempt to help them offset rising costs of living. However, the report also claims that the German lender will cut bonuses for debt and equity dealmakers.

Aurubis (NDA.DE) said that it is suspending its dividend policy and will no longer stick to paying out at least 25% of operating net income as dividend. Company said that it will now set a new payout ratio each year. Recommended dividend for fiscal 2021/22 was set at €1.80 per share, up from €1.60 per share in fiscal 2020/2021.

According to an Ansa report, Lufthansa (LHA.DE) is considering taking a minority stake in ITA Airways, an Italian state-owned airline. Report claims that Lufthansa is considering taking a 40-49% stake in the company, what would allow the Italian government to remain as majority holder.

Aurubis (NDA.DE) dropped at the beginning of today's trading after the company announced that it will scrap its current dividend policy. However, shares have quickly recovered from losses and are now trading 2% higher. Stock is testing a resistance zone in the €81.00 area, marked with recent local highs. Source: xStation5

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