DE30 fails to break back above key moving average

• DAX (DE30) fails to break above 33-period exponential moving average

• Germany may help airline of the collapse Thomas Cook

• Wirecard (WDI.DE) enters partnership with the Asian restaurant chain

Equities caught a bid after it was announced that China will allow its companies to purchase more US soybeans. Major stock market indices from Asia finished today’s trading higher while European shares launched Tuesday’s session with an upward price gaps. Travel and healthcare stocks lead higher while automotive and mining companies lag the most.

Source: xStation5

DE30 slumped yesterday being pressured by lacklustre PMI readings. Plunge took the index to as low as 12250 pts but much of this drop was later recouped. Index climbed back above the 12300 pts handle but further upside was limited by key moving average. 33-period exponential moving average (green line, H4 interval), that acted as an upward sloping trendline and a support earlier, halted upward move in the vicinity of 12380 pts handle. The index may now treat the aforementioned moving average as a downward sloping trendline and a resistance. In such a scenario, 12305 pts, 12210 pts and 12115 pts are levels to watch and a break below 12115 pts (lower limit of the Overbalance structure) would invalidate bullish trend.

Germany will aid airline of the collapsed Thomas Cook?

The German Finance Ministry is assessing whether it should meet request of Condor airline, a subsidiary of the collapsed Thomas Cook Group, for a bridge loan. Why would the German government help this company? Condor is domiciled in Germany and therefore it is the German company. German cabin personnel union approached the German government on Monday and said that Condor is a profitable airline and “deserves a chance for survival”. A point to note is that another German carrier - Lufthansa (LHA.DE) - submitted a bid for Condor in June but it was expected that the offer will be rejected. In case Condor is saved by the German government, Lufthansa may renew the offer and, given that Thomas Cook will have to sell its assets in order to repay enormous debt pile, it may be a successful takeover. Lufthansa trades among DAX top performers today on the news. 

DAX members at 8:53 am BST. Source: Bloomberg

Wirecard (WDI.DE) can be found among DAX top gainers on Tuesday morning. The German payments company announced that it has entered a partnership with Paradise Group, one of the most popular restaurant chains in Singapore with outlets across the numerous Asian countries. Wirecard will offer seamless payments solutions to the company. No financial details of the cooperation were revealed.

Allianz (ALV.DE) is said to be among bidders for Asian assets of Aviva, the British insurance group. Reuters reported that Allianz along with Nippon Life and MS&AD Insurance are interested in buying Singapore and Vietnam business of Aviva in a deal valued at $2-2.5 billion. Aviva did not comment on the Reuters’ report yet.

Term of Paul Achleitner, the Chairman of the Deutsche Bank (DBK.DE), is set to expire in 2022. However, he may be removed earlier than that as Bank’s top shareholders are said to be mulling such an option. It was reported by Bloomberg that Qatari royal family reviews potential candidates along with the international recruitment firm as shareholders’ dissatisfaction over prolonged share price slump grows.