DE30 drops after testing resistance at 13,940 pts

• European markets pull back

• DE30 drops below support at 13,875 pts

• Bayer sued by shareholders over Roundup case

Stock markets have launched a new week slightly higher. However, steam has run off quickly and now most of the blue-chips indices from the Western Europe trade slightly lower. German IFO business climate index for January came in slightly lower than expected at 90.1 (exp. 92 pts). Apart from that, there aren't any noteworthy readings scheduled for today. Joe Biden will deliver a speech on US manufacturing at 8:45 pm GMT and it could trigger some volatility on equity markets should he announce any bigger action. 

Source: xStation5

DE30 remains stuck within a wide 13,700-14,000 pts trading range and is unable to produce a bigger move in any direction. Following overnight gains, the index has managed to climb to the local peak from January 19 at 13,940 pts. However, a strong downward move occurred at the beginning of European cash trading and the index has given back most of the gains. DE30 broke below the support zone at 13,875 pts and the next level to watch can be found in the 13,800 pts area. A point to note is that if the downward move does not stop there and continue below the upward trendline, a short-term outlook may become bearish.

Company News

Deutsche Bank (DBK.DE) said on Sunday that it is launching a probe into relations with some of his clients. Announcement came after Financial Times reported that Deutsche Bank has been involved in mis-selling of investment products.

A group of Bayer (BAYN.DE) shareholders has sued the German company for a share price drop resulting from Roundup litigation. According to law firms representing shareholders, German company should have warned shareholders that Monsanto acquisition carries a significant risk of lawsuits. Bayer responded saying that claims are unfounded. Bayer has struck a settlement agreement in the Roundup case amounting to $11 billion.

Airbus (AIR.DE) said that 500 of its staff has been put into quarantine after a coronavirus outbreak has been detected at its factory in Hamburg. However, the site employs over 12 thousand workers and it is unclear whether the outbreak will cause any major production delays.

Share price of the Deutsche Bank (DBK.DE) dropped below the support zone marked with 78.6% retracement of early-2020 drop on Friday (€9.00 area). Stock remains below the zone today but trades a touch above Friday's close. Should downward move continue and the price drop below €8.75 (lower limit of the Overbalance structure), a deeper decline could follow. Source: xStation5