- Mercedes loses, BMW gains, Stellantis rises after decision to sell German joint venture to Italian-French-US car-maker giant
- BP with highest quarterly profit in more than a decade
- DAX and other European indices gain slightly at the open
DAX gains more than 0.7% at the open. Most European indices are gaining after a very mixed session yesterday. Declines are only seen in the UK after yesterday's close due to holidays. Investors are awaiting the next earnings releases from European companies. So far, the earnings season in Europe is going quite optimistically.
Much of the attention this week is on central banks. The RBA has decided to make a bigger interest rate hike. A double hike by the Fed is expected tomorrow and the BoE is likely to raise interest rates to the highest level in 13 years on Thursday. It is worth mentioning that the pound has been very weak recently and macroeconomic data from the UK has not been impressive.
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DE30 tested the downward trendline and the supply zone between moving averages and fell at the end of last week. Along with the rebound on Wall Street, contracts on the German DAX index started to rebound yesterday. The DE30 is back around 14000 points today and we believe that there is a chance that the DE30 may retest the downward trend line in case of profit-taking on a short positions on Wall Street that are in anticipation of a big move from the Fed. The key demand zone for the index is between the 13800 points and the retracement of 50.0 of the last upward impulse.
Company news:
BP (BP.UK) published its financial results for the first quarter of this year. The company's revenue was $51.22 billion. Adjusted net income was $6.25 billion against expectations of $4.43 billion and came the highest in at least a decade. The company announced further plans to invest in oil, gas and green energy, mainly in the UK. The company expects increased volatility in the oil market in near future and expects the company's oil production to decline in the second quarter of this year, compared to the first quarter. Shares of the company jumped at the open.
BMW (BMW.DE) and Marcedes-Benz (MBG.DE) have decided to sell their joint venture Share Now to Stellantis (STLA.IT). The company was founded just over a year ago as a result of the merger between Fiat Chrysler and PSA. In addition to its automotive business, the company intends to become the world's largest car rental company. Mercedes loses about 1% at the open, BMW gains 1.22% and Stellantis gains about 1.5%.
HSBC (HSBA.UK) is holding steady after Chinese insurer Ping An, one of its largest shareholders called on the company to spin off part of its Asian business to fully enable the company to grow. Asia is a key location for HSBC due to 2/3 of its profits from markets there. HSBC is one of the largest banks in Europe and the world. Ping An owns 8.23% of HSBC shares. HSBC is gaining slightly around 0.2%, after fairly strong gains in Hong Kong trading.
BP shares gained almost 3% at the open, but failed to break above the recent local peak, reacting to resistance at £4 per share. The company remains about 15% below levels just before the pandemic and more than 30% from its 2018 highs. Source: xStation5
