DE30: European markets rally on tariff relief and UK election results

• Stock markets rally on tariffs and UK elections

• DE30 at the highest level since January 2018

• Delivery Hero (DHER.DE) agrees to acquire South Korean food-delivery app

Stocks in Europe trade significantly higher on the final trading session of the week. Optimism is boosted by win of the Conservatives and tariff postponement. DE30 trades at the highest level since January 2018 as trade-sensitive stocks rally.

Markets rally on Conservatives win and Trump’s trade announcement

Stock markets on the Old Continent are rallying today on the back of two stories. First of all, Conservatives managed to win a significant majority in the UK elections. Such a development was welcomed by markets as it means that risk of a no-deal Brexit is much smaller now. The second story that is lifting markets today is Trump’s decision to delay tariffs that were scheduled to go live on Sunday, December 15. Moreover, it is said that the US is even considering slashing existing tariffs by half in exchange for big agricultural purchases. Traders may expect upbeat moods to prevail through the day.

Source: xStation5

DE30 jumped above the key resistance at 13300 pts at the opening of today’s trading. The German index moved as high as 13458 pts before pulling back - the highest level since late-January 2018. The closest and only resistance ahead can be found in the 13530-13560 pts area, where all-time highs can be found. A lot of uncertainty was put aside yesterday as Conservatives secured majority in Parliament and December tariffs were postponed. In turn, optimism may remain on the markets for the remaining part of the year. However, should bad news hit the wires, there are some support levels to watch on DE30 chart. The first one can be found at the aforementioned 13300 pts handle. The lower limit of the recent consolidation (13160-13180 pts) should act as the next support. Key support - lower limit of the local market geometry - can be found at around 12800 pts.

DAX members at 9:30 am GMT. Source: xStation5

S&P decided to cut rating for Daimler (DAI.DE) from “A” to “A-”. Outlook was left unchanged at “negative”. The agency reasoned its decision saying that Daimler is significantly exposed to geopolitical risks and needs to increase offering of electric vehicles in order to remain competitive in a transition period for the automotive industry. S&P expects company’s cash generation and profitability to remain weak beyond 2020.

Qantas Airways choose Airbus (AIR.DE) to provide it with jets for ultra long-range flights. The Australian carrier plans to launch direct Sydney-London and Sydney-New York flights. The decision ends a two-year fight for the contract between Boeing and Airbus. Qantas is preparing to place an order for 12 jets.

Delivery Hero (DHER.DE) agreed to buy a controlling stake in Woowa Brothers, the largest South Korean food-delivery app. Delivery Hero will acquire 87% stake in Woowa for €1.7 billion in cash and up to €1.9 billion in shares. Delivery plans to boost its presence in Asian through the deal.

Analyst actions

• Henkel (HEN3.DE) was cut to “neutral” from “buy” at Goldman Sachs. Price target was set at €90

Airbus (AIR.DE) found a support at the €123.00 handle, where one can find the 61.8% retracement level of the latest upward impulse, the 200-session moving average (purple line) as well as the support zone marked by previous price reactions. The European planemaker benefits from today’s upbeat moods and may be set to retest its ATH at around €137 over the coming weeks. Source: xStation5