DE30 eyes another test of 14,500-14,550 pts support

• European indices trade slightly lower on Thursday

• DE30 eyes another test of 14,500-14,550 pts support

• Volkswagen says lockdowns start to impact its production at Shanghai plant

European stock markets are trading mostly lower on Thursday. A drop in oil prices failed to lift sentiment with major blue chips indices from the Old Continent trading 0.3-0.7% lower. Indices from Austria and Portugal are exceptions, trading slightly higher on the day. Russian blue chips indices trade 5% higher (both RUB- and USD-denominated). 

DE30 dropped yesterday but managed to defend a support zone ranging between 14,500 and 14,550 pts. While the index managed to recover slightly later on, bulls struggled to deliver a break above the 50-hour moving average (green line). It looks like the German index is eyeing another test of the 14,500-14,550 pts support zone. A period of range trading between 14,500 pts support and 14,850 pts resistance cannot be ruled. Source: xStation5

Volkswagen (VOW1.DE) announced that it will have to shut part of its factory in Shanghai, China. Decision comes as lockdowns imposed in the region make it impossible for carmaker to procure parts required in the production process. Volkswagen said that it is exploring options that will allow it to keep production in China running amid new pandemic restrictions.

Bayer (BAYN.DE) announced that it plans to spend €2 billion on expanding its pharmaceutical manufacturing network over the next 3 years. Investments will be made into automatization, digitalization and other new technologies. 

Analysts' actions

• Commerzbank (CBK.DE) rated "neutral" at Goldman Sachs. Price target set at €9.70

• Deutsche Bank (DBK.DE) rated "buy" at Goldman Sachs. Price target set at €18.70

• SAP (SAP.DE) rated "outperform" at Credit Suisse. Price target set at €152.00

• BASF (BAS.DE) downgraded to "neutral" at Oddo BHF. Price target set at €68.00

• Telefonica Deutschland (O2D.DE) upgraded to "neutral" at Exane. Price target set at €2.40

• Cancom (COK.DE) downgraded to "sell" at DZ Bank. Price target set at €50.00

Shares of Volkswagen (VOW1.DE) trade lower today after the company warned about potential drop in production in China due to lockdowns. Stock has halted advance slightly below the resistance zone marked with previous price reactions and upper limit of market geometry earlier this week. As neither market geometry, nor previous local high was breached, downtrend structure is left intact. Source: xStation5