DE30 erases overnight gains

• European markets trade mixed

• DE30 pulls back towards 13,000 pts

• Henkel, Deutsche Post and Zalando updated full-year forecasts

European stock markets are trading mixed on the final trading day of the week. German, Spanish and Italian equities pull back while UK, French and Dutch shares advance. Polish WIG20 (W20) slumps 2%. Spiking Covid-19 infections across Europe are the main concern with numerous European countries deciding to reimpose tougher restrictions. German companies start reporting preliminary results for Q3 2020.

Source: xStation5

DE30 tested 13,100 pts overnight but failed to break above and has been pulling back since. Index approaches the 13,000 pts mark. The first support to watch can be found in the 12,900 pts area, where the lower limit of the Overbalance structure (purple boxes) and mid-term support zone is located. Should bulls regain ground and halted declines, the index may march towards overnight highs and the resistance zone at 13,125 pts. There are no major, market-moving releases scheduled for today so one can expect some headline trading today. While Donald Trump ended stimulus talks earlier, yesterday he hinted that they may reopen so traders should look out for news on any progress in talks.

DAX members at 10:18 am BST. Source: Bloomberg

Company News

Henkel (HEN3.DE) decided to update forecasts for full-2020 on the back of solid preliminary figures for Q3 2020. The company said organic sales growth in the third quarter was 3.9%. Beauty Care unit had 4.3% growth, Adhesive Technologies grew 1.3% while the Laundry & Home Care segment grew 7.7%. Henkel expects negative organic sales growth of -1 to -2% for the full-2020 and EBIT Margin between 13 and 13.5%. EPS is expected to decline 18-22% in 2020.

Deutsche Post (DPW.DE) also raised its full year forecast after a solid Q3 performance. Company is benefiting from a rising in e-commerce triggered by the coronavirus pandemic and expects to generate €4.1-4.4 billion in operating profit in 2020. Previous forecasts pointed to €3.5-3.8 billion.

Zalando (ZAL.DE) released preliminary figures for Q3 2020. The company said that gross merchandise volume increased 28-31% to €2.43-2.48 billion while revenue increased 20-23% to €1.83-1.87 billion. Adjusted EBIT is seen in €100-130 million range. Zalando decided to boost full-year forecast and now expects gross merchandise volume to grow 25-27% (previously 20-25%), revenue to increased 20-22% (previously 15-20%) and adjusted EBIT in €375-425 million range (previously €250-300 million).

Henkel (HEN3.DE) launched today's trading with a big bullish gap thanks to a boosted full-year outlook. Stock tested resistance zone at €95.50, marked by pre-pandemic peaks, but failed to break above. Share price is pulling back but still remains above yesterday's close. Source: xStation5