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European stocks trade lower
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DE30 attempts to bounce off the short-term swing level at 14,320 pts
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Hochtief drops 5% after announcing plan to boost share capital
European stock market indices are trading lower ahead of the European Central Bank monetary policy announcement (12:45 pm BST). The Bank is expected to provide strong guidance that rate hikes will come at the coming meetings, which may exert pressure on equities. However, while such a hint may be offered in a policy statement, it will be the press conference of ECB President Lagarde at 1:30 pm BST that may provide the most clarity.
Source: xStation5
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Open real account TRY DEMO Download mobile app Download mobile appJust as we have hinted yesterday, DE30 broke below the neckline of head and shoulders pattern at 14,470 pts and the downward move accelerated. The index is currently trying to bounce off the 14,320 pts area, marked with lows from the 1st and 2nd of June. A lot will now depend on the ECB. If a hawkish message is sent, index may resume slide and move towards the textbook range of a downside breakout from the aforementioned head and shoulders pattern (14,210 pts). On the other hand, a lack of clear hint at incoming rates hikes would be a big dobish surprise and may help DE30 recover some more ground.
Company News
Volkswagen (VOW1.DE) is exploring options for setting up a battery manufacturing plant in North America. Company is currently looking at potential locations. No final decision on whether to set up such a factory has been made yet and it is expected to be made by the end of this year.
Airbus (AIR.DE) delivered 47 aircraft in May, a drop of 6% YoY from 50. This brings January-May deliveries to 235 aircraft and puts under question whether the company is able to meet its goal of 720 deliveries in full-2022. Airbus booked 13 new orders in May 2022.
Hochtief (HOT.DE) is trading over 5% lower today. Company announced that it plans to issue 7.1 million new shares to institutional and corporate investors via a private placement. The move would increase the number of company's shares by around 10%.
Analysts' actions
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Wacker Chemie (WCH.DE) downgraded to "underweight" at JPMorgan. Price target set at €160.00
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Daimler Truck (DTG.DE) downgraded to "hold" at DZ Bank. Price target set at €30.00
Shares of Hochtief (HOT.DE) are plunging today, after the company announced plans to issue 7.1 million new shares. Stock is trading 5% lower on the day and is testing the support zone in the €57.40 area. Stock dropped below the 200-hour moving average that has provided support recently - a move that may hint at a period of weakness for the stock. Source: xStation5
