DE30: European stocks slide at the start of a busy week

• European stocks slide at the beginning of a busy week

• DE30 tests 200-hour moving average but fails to break above

• Wirecard (WDI.DE) drops after another Financial Times report

Stocks in Europe are trading lower on the first trading session of a new week. However, scale of declines is minor. Markets are in “wait-and-see” mode as Fed and ECB are scheduled to announce their monetary policy decisions this week. Moreover, Sunday is the deadline for imposition of a new round of tariffs and so far it is still uncertain whether they will go live or not. Having said that, investors should focus primarily on trade-related news and central banks over the next few days.

Source: xStation5

Following a break below the lower limit of the previous trading range (13150-13300 pts), DE30 started to move in a new sideways channel. New range is being limited by the support zone ranging above the 13050 pts handle and the 200-hour moving average serving as a resistance (purple line, 13175 pts area). The upper limit of the range was tested in today’s pre-market trading but the index failed to break above it and a pullback occured. Downward move was halted in the 13130 pts area and bulls are trying to push the index higher. Given that there is no clear reason behind the drop, one cannot rule out that the index will try to retest the aforementioned moving average in the remaining part of the session as it is the near-term resistance to watch.

DAX members at 9:24 am GMT. Source: Bloomberg

Wirecard (WDI.DE) can be found among DAX top laggards at the beginning of a new week. Shares of the German payments company are once again being pressed by Financial Times reporting. Recent FT report claims that Wirecard has increased its cash reserves in 2017 by using funds from trust accounts. Wirecard explained that funds on trust accounts cannot be accessed at any time and that judgments on it cash were reviewed in detail during recent audit process. Nevertheless, the company experienced significant share price drop today.

Osram Licht (OSR.DE) is surging today after it was announced that at least 55% of company’s shares were tendered to AMS offer. The takeover is expected to be completed in the first half of 2020 and will increase AMS’ presence in the sensors market.

According to Sueddeutsche Zeitung report, Deutsche Bank (DBK.DE) has severed ties with some clients as it stepped up money laundering fight. Report says that the German bank reviewed around 20 thousand files on particularly risky clients in June and is expected to review another 40 thousand files by June 2020. Deutsche Bank can be found among DAX top movers on Monday.

Analyst actions

• HeidelbergCement (HEI.DE) was cut to “neutral” from “overweight” at JP Morgan. Price target was set at €71

HeidelbergCement (HEI.DE) is trading in a narrowing range limited by two trendlines. The stock found support at the 200-session moving average (purple line) and keeps testing the upper limit of the range. Should a break higher occur, bulls may focus on the €70 handle as the first resistance. Source: xStation5