DE30 fails to hold above 14,000 pts

• European markets trim early gains

• DE30 fails to hold above 14,000 pts

• Nordex slumps after guidance cut

European stock market indices are trading higher on Wednesday, although off the daily lows. Part of the gains was trimmed following a bullish opening of the session. Spanish and Italian indices are top performers, gaining around 0.3% each, while Polish WIG20 (W20) lags the most with a 1% drop. A key event of the day is the release of FOMC minutes at 7:00 pm BST. However, the document is unlikely to show any major surprises therefore impact on the markets may be short-lived.

Source: xStation5

DE30 continues a pullback started after a failed attempt of breaking above the neckline of an inverse head and shoulders pattern. Index attempted to halt declines at support zone marked with 38.2% retracement of the upward move started in March 2022 but relief was brief. Another wave of selling arrived after launch of the cash session today and DE30 is making a break back below 14,000 pts. The nearest support zone to watch is marked with 50% retracement in the 13,700 pts area. This is also a shoulder line of the aforementioned inverse head and shoulders pattern therefore and break below would invalidate this technical setup. 

Company News

Aroundtown (AT1.DE) reported a 12% YoY increase in Q1 2021 EBITDA to €258.2 million. Net income was 15% YoY lower at €124.5 million. Funds from operations per share increased from €0.073 in Q1 2021 to €0.080 in Q1 2022. Company maintained full-year forecasts and still expects full-year FFO per share to reach €0.31-0.34.

Nordex (NDX1.DE) announced a downgrade to its full-year outlook. Company expects sales to reach €5.2-5.7 billion, down from previous forecast of €5.4-6.0 billion. EBITDA margin forecast was lowered to -4% to 0% from 1-3.5%. Capital expenditures forecast was left unchanged at €180 million. Company said that the new updated guidance accounts for the impact of the Russia-Ukraine war as well as supply chain disruptions.

Heidelberg (HEI.DE) said that it aims to reduce carbon emissions by 30% from 2021 levels in order to become carbon neutral by 2050.

BMW (BMW.DE) established a closed loop recycling plant in China that allows for recycling of nickel, lithium and cobalt from batteries. Production of batteries from recycled materials leaves a 70% smaller carbon footprint than production from newly mined materials.

Nordex (NDX1.DE) is plunging today following a forecast downgrade. Stock is trading 17% lower on the day and is making a break below the support zone marked with 78.6% retracement as well as recent local low. Shares are at 20-month lows and if pullback deepens, €8.50 support may be at risk. Source: xStation5