DE30 eases after testing 11,800 pts

• European shares trade higher but momentum eased

• DE30 tested 11,800 pts ahead of European cash session

• Supervisory Board of Lufthansa (LHA.DE) held off on approving state aid

It looks like markets always find good news to offset bad ones. China-US tensions continue to heat up with Pompeo saying yesterday that Hong Kong is no longer independent from China. Moreover, China is expected to pass Hong Kong security bill and the US vowed to impose sanctions if it does. However, the looming trade war was completely played down after the EC unveiled €750 billion recovery fund proposal. Gains continued overnight but some weakness can be spotted during the European session.  

Source: xStation5

After clearing the 11,450-11,600 pts zone, DE30 has run into another important resistance. The index tested price zone ranging around 11,875 pts ahead of the European cash session open but gave up part of gains since. This is an important resistance marked with numerous tests over the previous 20 months. However, given strong upward momentum , this zone could also fall victim to bulls' binge buying. Some US hard data will be released in the early afternoon, including jobless claims and revised GDP report, but markets may not see much reaction to these. However, politics could play a role. Trump is expected to sign an executive order targeting social media companies today and it could have an impact on the sentiment. However, it seems that a major escalation in China-US tensions would be needed to trigger a more noticeable pullback on stock markets. The near-term support is the aforementioned 11,450-11,600 pts zone.

DAX members at 10:06 am BST. Source: Bloomberg

Supervisory Board of the Deutsche Lufthansa (LHA.DE) held off on accepting €9.9 billion state aid proposal. Decision comes amid significant opposition from other European carries that vowed to appeal against Lufthansa state aid to the EU. Moreover, Lufthansa's executives disagreed with an idea that Lufthansa will have to resign from some takeoff-and-landing slots in Frankfurt and Munich.

Deutsche Boerse (DB1.DE) entered partnership with Chinese data provider Wind. The two companies will work to connect the data and services portfolio of Deutsche Boerse with Wind's network.

Allianz (ALV.DE) plans to sell Life Insurance business to take advantage of the fact that M&A activity remains quite robust in this sector in spite of the coronavirus pandemic. Generali (G.IT), the Italian insurer, is considering a similar move. Life insurance business is capital-intensive therefore the sale could allow insurers to make more efficient use of funds elsewhere.

Morgan Stanley initiated coverage of Infineon Technologies (IFX.DE) with a "buy" rating. US Bank said that Infineon is its preferred company in the European semiconductor sector. Analysts expect a compound annual revenue growth rate of 23% in 2019-2024 period. Morgan Stanley also sees supportive customer and regulatory trends. Price target was set at €24, implying over 20% upside against current market price.

Allianz (ALV.DE) is pushing higher today. The stock broke above €167.50 price zone yesterday and made a retest of the zone later one. Near-term resistance can be found in the €175 area (50% retracement of the February-March sell-off). Source: xStation5