Today's European session brings a continuation of the worsening sentiment of most stock market benchmarks. The German DE30 is currently losing nearly 0.7%, the French FRA40 is down 0.16%, and the Polish W20 is down 1.22%. Investors' attention today is focused on the reading of the ZEW institute's index, which showed a decline in sentiment toward the German economy.
The current situation index fell from -27.6 to -45.8 points, while the market expected -34.5 points. The expectations sub-index also fell short of expectations, as it came in at -53.8 points (expected: -40.5 points; earlier: -28.0 points). Overall, the reading is pessimistic and indicates deteriorating sentiment in Germany. One of the main factors in the emerging uncertainty is the country's energy situation, projected ECB hikes and tightening in China.
ZEW expectations index at near 30-year lows. Source: Bloomberg
DE30 index, H4 interval. The German blue-chip benchmark is down more than 0.7% today and falls below the support line mentioned yesterday near 12,755 points, which is now an important checkpoint for the demand and supply sides. At the moment, the zone near 12,600 points can be taken as a local support level, and the previously mentioned level of 12,755 points and the 50-period exponential moving average (blue curve) as resistance levels. Source: xStation 5
Company news:
BASF SE (BAS.DE) reported better-than-forecast results for the second quarter of 2022. Quarterly earnings before interest, tax and special items amounted to €2.34 billion, slightly below the €2.36 billion it earned a year earlier. The company's detailed results will be published on July 27. The full-year forecast is expected to remain unchanged. The company's shares are currently trading down more than 2.5% due to uncertainty and gas issues in Germany, a strong US dollar and high commodity prices. According to Morgan Stanley, the consensus beat may not translate into increased investor interest by the negative macro environment.
Analyst's action:
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Barclays rated Deutsche Bank (DBK.DE) as "Neutral" and maintained its target price at €12.
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Jefferies maintained its "Buy" recommendation on the shares of Allianz SE (ALV.DE). The target price remained at €240.
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Jefferies maintained a "Buy" recommendation on the shares of HelloFresh SE (HFG.DE). The target price was reduced from €81 to €66.
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JP Morgan maintained a "Buy" recommendation on the shares of BASF SE (BAS.DE). The target price was lowered from €74 to €55.
The most active stocks in the DAX index (DE30). Source: Bloomberg
Largest percentage changes in companies included in the DAX index. Source: Bloomberg
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