DE30: European indices try to recover from Thursday's drop

• European indices trade higher on Friday

• DE30 tests 14,500-14,550 pts resistance zone

• Thyssenkrupp seeks to renegotiate steel contracts with automotive customers

European stock market indices are trading higher on the final trading day of the week, following strong declines yesterday. Majority of the blue chips indices from Western Europe trade 0.3-0.9% higher today. Polish WIG20 (W20) is top performer among European indices today, trading 1.3% higher at press time. While release of the euro area inflation data didn't have much of an impact on the markets, elevated volatility is expected in the early afternoon when NFP report for March is released (1:30 pm BST).

Source: xStation5

German DE30 pulled back into the previous short-term trading range (14,200-14,550 pts). Index broke back into the range yesterday after Russian president Putin signed a decree requiring so-called "unfriendly countries" to pay for gas in rubles. Those demands were rejected by G7 countries, including Germany, threatening a significant economic hit should Russia decide to cut off gas supply completely. An attempt to break back above the 14,500-14,550 pts resistance zone is being made this morning. However, a failure to do so may see the index pull back towards the lower limit of the range in the 14,200-14,250 pts area. 

Company News

Martin Brudermuller, CEO of BASF (BAS.DE), said that even a curb in Russian natural gas exports to Germany could pose significant economic damage, let alone full stop of supply. Brudermuller said that it would take Germany 4 to 5 years to become independent from Russian gas but energy transition will become more difficult after war in Ukraine was launched

Amid widening lockdown in Shanghai, Volkswagen (VOW1.DE) was forced to temporarily suspend production at its factory in the city. Production will be suspended through April 5, deadline for current restrictions. However, it cannot be ruled out that those will be extended and suspension at VW plant may be suspended as well.

According to Argus Media, Thyssenkrupp (TKA.DE) started to renegotiate steel contracts with automotive companies it has reached in January 2022. Company wants to pass an increase in raw material prices onto its customers in order to preserve margins. It is said that new steel prices may be €300-320 higher per tonne than €900-1000 agreed on in January.

Analysts' actions

• Varta (VAR1.DE) upgraded to "buy" at M.M Warburg. Price target at €113.00

In spite of reports saying that Thyssenkrupp (TKA.DE) will take actions to preserve margins, shares of the company are trading lower today. Stock broke below the €8.00 support zone yesterday and the way for a deeper drop, potentially to as low as €6.00 area, has been opened. Source: xStation5