DE30: DAX above the 16,000-point barrier despite limited market volatility

• DE30 breaks above 16,000 point barrier
• ECB minutes come off relatively dovish
• Riskbank decision supports sentiment of real estate companies

General market situation

Thursday's session on European markets is proceeding in a slightly better mood. The Dax breaks out slightly above the psychological barrier of 16,000 points. The key macro reports of the day were preliminary PMI data for November and ECB Minutes from the latest central bank meeting. 

Germany, PMI indices for November.

• Manufacturing. Current: 42.3; Expected: 41.2; Previous: 40.8
• Services. Current: 48.7 Expected: 48.5 Previous: 48.2

Overall, the tone of the Minutes is relatively dovish. Bankers believe that unless inflationary pressures surprise in the future, the current level of interest rates will be sufficient to bring inflation to target. Noteworthy, the bankers are communicating the risk of "doing too much" relative to monetary policy, which we can also perceive as a dovish signal. 

At the moment, sentiment on individual European companies has deteriorated slightly. Source: xStation 5

Futures based on the German DE30 are trading nearly 0.19% higher on an intraday basis and are slightly breaking out above the key resistance barrier set by the 16,000-point level. A possible sustained breakout above these structures could open the way for further rallies towards the local session peaks of late August/early September 2023. On the other hand, the key resistance zone for possible observation is the level of 15,700 points. However, it is worth remembering that due to the holiday in the US, market liquidity is low today, which could create a lot of uncertain market behavior. Source: xStation 5

News:

The German Defense Ministry has denied press reports by the Augsburger Allgemeine newspaper that the government has frozen new spending commitments using money from a special off-budget fund for modernizing the armed forces. However, the shares of defense-related companies are losing ground in today's session. Rheimentall (RHM.DE) shares are down 1.9%, and Hensoldt (HAG.DE) shares are losing 1.57%.

Bayer (BAYN.DE) shares came under slight pressure again. Investors viewed media reports that Monsanto had been ordered by a U.S. court to pay hundreds of millions of dollars in damages as negative for the stock price. A U.S. jury ordered Monsanto to pay $165 million to employees of a school located near Seattle, who claimed that chemicals produced by the company leaked from light fixtures and caused their health problems.

Riskbank's decision to keep interest rates at 4.00% boosted sentiment around the Swedish real estate sector. Shares of Castellum (CAST.SE) and SBB (SBBB.SE) gained 0.52% and 1.53%, respectively.

Analyst recommendations:

* Kion (KGX.DE): Stifel downgraded its recommendation on the stock to a "hold" rating. Target price set at 34 euros.