Summary:
- German stocks outperform European peers at the beginning of Tuesday’s trading
- DAX (DE30) eyes a test if the 12300 pts handle
- Commerzbank-ING merger talks collapsed?
The European stock market indices launched Tuesday’s session higher ignoring Trump threat to push with additional tariffs on China in case Xi Jinping does not meet with him during the G20 meeting. The German DAX is outperforming its European peers in the first minutes of trade. However, this should not come as a surprise as the German stock market was shut yesterday and missed an upward move that rolled through European markets. Having said that, today’s outperformance can be viewed as “catching up” with the rest of the Old Continent.
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Following a brief pullback and a break out of the upward channel, the German DAX (DE30) resumed upward move. The index is trading at the 3-week high and more gains may be coming as the nearest resistance level is localized at 12300 pts handle. In case of a deeper pullback, traders should watch the 33-period EMA closely (green line, H4 interval) as it saw some price reaction earlier. Source: xStation5
No merger between Commerzbank and ING?
A few days ago rumours surfaced that the German and Dutch governments may pursue merger of Commerzbank (CBK.DE) and the Dutch ING. Martin Zielke, CEO of Commerzbank, and Ralph Hamers, CEO of ING, were seen meeting at least twice recently. However, the odds were not in favor of the tie-up going through as there are significant regulatory hurdles towards cross-border banking mergers in the European Union. The case was even highlighted by the ING executives last week. The talks are said to have broken down already according to today’s Handelsblatt report. Note that tie-up of Commerzbank and ING had a potential to create the biggest bank in Germany as the two hold, respectively, second and third position on the German market.
DAX members at 8:34 am BST. Source: xStation5
Other company news
Volkswagen (VOW.DE) is trading higher at the beginning of the Tuesday session. Good performance can be ascribed to news flowing from China. Alibaba, the Chinese holding company, announced that its AI research division will partner with various carmakers in a smart mobility initiative. Among companies involved one can find Audi, subsidiary of Volkswagen. However, little details about the project are known at the moment.
Wirecard (WDI.DE) is another stock that is trading higher on Tuesday morning. The German payments company announced that it now enables payments for the first online IKEA store in Thailand. E-commerce is a rapidly growing market segment in Thailand with current number of Thai e-commerce users being estimated at close to 40 millions, more than half of the country's population.
Among a few German blue chips that are trading lower today, one can find E.ON (EOAN.DE). The German utility company announced today that barbara Schadler, Executive Vice President for Communications and Public Affairs will leave the company by the end of September to pursue new professional challenges. E.ON said in a press release that her successor will be announced shortly.
Volkswagen (VOW.DE) shares keep trading within a range. The stock has recently bounced off the lower limit of the range and may be now set to climb towards the upper limit. Having said that, investors should watch closely the €155 handle, the midpoint of the zone that acts as upper limit. Source: xStation5
