DE30 falls as trade agreement gets more distant

• Trade pessimism continues to pressure global stocks

• DE30 eyes key support at 13000 pts

• Moody’s lowers outlook for German banking sector

Stocks in Europe echoed performance of the Asian shares and opened significantly lower today. The move is response to downbeat comments concerning Sino-US trade deal. Declines can be spotted all across the Old Continent with Belgian and Dutch equities underperforming the most. Russian indices manage to hold slightly above yesterday’s closing prices. Miners and IT stocks lag the most while personal goods companies and telecoms seem the most resilient.

Source: xStation5

DE30 broke below the lower limit of the consolidation range yesterday. Initial dip was halted in the vicinity of 13100 pts handle and a bounce higher occurred from there. Nevertheless, the index failed to break back above the earlier-broken lower limit of the trading range and resumed downward move. The attention now shifts to the 13000 pts handle. This level is important not only from a psychological point of view, but also from a technical point of view - it marks the potential range of the breakout from recent consolidation. 

DAX members atfter the first half an hour of the cash session. Source: Bloomberg

Deutsche Bank (DBK.DE) and Commerzbank (CBK.DE) are trading lower today. On one hand, it can be ascribed to a broad market declining. On the other hand, statement from Moody’s could be the reason.The rating agency said that outlook for the German banking sector has shifted from stable to negative. The agency reasoned its stance saying that creditworthiness of the German lenders is likely to decline over the next 12-18 months as low interest rate environment will make it tough to out-earn costs. 

Thyssenkrupp (TKA.DE) can be found among MDAX top laggards today. Decline is caused by the proposal to suspend dividend payments. Thyssenkrupp wants to suspend dividend payments for the previous fiscal year as it warned that the ongoing restructuring process is likely to deepen losses. The decision will be subject to shareholders’ approval.

BMW (BMW.DE) signed a long-term cooperation agreement with Samsung. The deal is worth €2.9 billion and will encourage cooperation in fifth-generation battery cells. Under the deal, Samsung will supply Korean subsidiary of the German carmaker with battery cells in 2021-2031 period.

Deutsche Bank (DBK.DE) managed to put a downward trend to a halt and started moving sideways. However, a sequence of lower highs can be spotted therefore bears seem to be in markets’ favour. The stock is testing short-term swing level of €6.50 at press time. Not that this level prevented price from painting a lower low at the turn of October and November. In case a break lower is delivered, attention will shift to the support at €6.30. Source: xStation5