DE30 drops back below 14,000 pts as markets remain nervous

• European indices trade lower

• DE30 drops back below 14,000 pts

• Earnings from Lufthansa, ProSiebenSat.1 and KION Group

European stock markets are trading mostly lower on Thursday. Blue chips indices from Western Europe traded 0.4-1.0% lower on the day. Spanish IBEX (SPA35) is an exception as it drops as much as 1.6%. On the other hand, Austrian equities outperform with ATX index (AUT20) gaining over 2%.

Ukraine-Russia conflict remains a key driver but markets are not as reactive to frontline news as they were last week. Talks between Ukraine and Russia were reportedly scheduled for today but it is unsure whether the Ukrainian delegation will attend.

Source: xStation5

Recovery on the DE30 market, that was launched yesterday, was halted this morning. German index failed to break above the 50-hour moving average in the 14,050 pts area (green line). Note that this was a second attempt of clearing this resistance and repeated inability to break above points to weakness of buyers. Subsequent pullback has pushed the price towards the 13,800 pts area, where a key near-term support can be found. If DE30 fails to break below this zone, a period of sideways move in the 13,800-14,050 pts range cannot be ruled out.

Company News

Lufthansa (LHA.DE) reported a net loss of €2.19 billion in 2021, down from a net loss of €6.73 billion in 2020. Company said that its traffic revenue increased 31% YoY to €11.88 billion while annual total revenue reached €16.81 billion, up 24% YoY. Lufthansa said that it expects traffic to continue to recover this year with relaxation in Covid-19 restrictions. However, the German carrier said that conflict in Ukraine and its consequences may have a significant negative impact on the operations.

KION Group (KGX.DE) reported a 49.9% YoY expansion of the order book in 2021, to €6.66 billion. Sales increased 23.4%, to €10.29 billion, while adjusted EBIT jumped almost 54% to €841.8 million. Net income jumped over 100%, to €568 million. Company proposed €1.50 dividend per share. 

ProSiebenSat.1 (PSM.DE) reported a 68% YoY increase in 2021 net income, to €449 million. Adjusted earnings per share reached €1.60. Adjusted EBITDA was 19% YoY higher at €840 million while revenue increased 11% yo €4.49 billion. Company proposed a €0.80 dividend per share. ProSiebenSat.1 said that its results were supported by recovery in ad revenue. Company expects revenue to reach around €4.6 billion and adjusted EBITDA to reach around €840 million in 2022.

Analysts' actions

• Hapag Lloyd (HLAG.DE) rated "neutral" at Oddo BHF. Price target at €280.00

Lufthansa (LHA.DE) is one of the worst performing German stocks today. Stock drops over 6% lower on the day, following release of 2021 earnings. Share price broke below the short-term upward trendline last week and is making a break below a short-term swing level at €9.50 today. Source: xStation5