DE30: FTSE MIB sinks on the back of big budget deficit planned

Summary:

• Merkel does not ruled out possibility of pushing Weidmann candidacy for the ECB President post

• DAX (DE30 on xStation5) sinks at the beginning of the trading session

• Wirecard (WDI.DE) to support Chamber of Commerce and Industry digitization process

Asian equities followed into US peers footsteps and marched higher. Biggest gains were observed on the Japanese market as Nikkei (JAP225) closed 1.37% higher. In Australia S&P/ASX 200 (AUS200) added 0.43%. In China major stock indices were all trading significantly higher.

Major stock indices from the Western Europe opened significantly lower on the final trading day of the week. Italian stocks sank at the beginning of the trading session on the back of suggested higher deficit in the budget. Equities in Switzerland and the United Kingdom performed the best in the first minutes of trade but even there declines were spotted. Banks and car makers were among the worst performing sectors while miners outperformed.

DE30 managed to climb back to the resistance zone ranging 12380-12420 pts. However, bulls surrendered today as news of big Italian budget deficit exerted pressure on the whole European stock market. Downward move was halted by the 33-period moving average (green line) on the H4 interval but more weakness may be ahead. Source: xStation5

News spurring recently suggested that the German Chancellor Angela Merkel may drop the race for the next ECB President to be German. However, the situation is a bit more complex. During event in Augsburg yesterday, the Chancellor said that she cannot rule out pushing German candidate for the ECB President. She said that in case Manfred Weber will not become next European Commission president Germany will seek to secure head of the ECB post. Merkel said that she has high opinion of the current Bundesbank leader, Jens Weidmann, as he was her economic advisor. Additionally she said that it is wrong to assume that backing Weber as candidate for the European Commission president means dropping support for Weidmann in a race for the seat of ECB President.

Major European stock benchmarks after the first hour of trade:

• DAX (DE30): -0.80%

• FTSE 100 (UK100): -0.15%

• CAC 40 (FRA40): -0.53%

• IBEX (SPA35): -0.96%

• FTSE MIB (ITA40): -2.53%

Wirecard (WDI.DE) resists downward pressure thanks to news of big digitization contract. Source: Bloomberg

Company News

While this may not be news concerning particular company it is worth to mention words of the German Justice Minister, Katarina Barley. Barley said that she would like shareholders to have bigger influence over managers pay. She proposed a vote every four year on the salary of managers and every time a major change is being made in the company.

Wirecard (WDI.DE) is the best performing DAX stocks today. As a reason behind such a good performance one can name news that spurred today in the morning. Namely, Wirecard will support the Association of German Chambers of Commerce and Industry in the digitization process. The process will be nationwide and its aim is to provide tools for full digitization of all the future transactions.