Summary:
- German DAX underperforms other indices from the Western Europe
- Downward momentum on DE30 eases after reaching the support zone
- Gerresheimer (GXI.DE) leads MDAX higher after earnings release
Major European stock market indices trade mixed at the beginning of Thursday’s session. Equities in France, Spain, Italy and the UK advance while the German DAX trades flat. On the other hand, Swedish, Belgian and Russian equities are underperforming. The Polish WIG20 (W20) index is the best performing European blue chips index around 9:30 am BST.
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Downward momentum on the DE30 market eased as of late. The German index is trying to break below the short-term support zone around the 12350 handle for the third time this week. In case this hurdle is once again defended by bulls, it will be crucial whether the index manages to break above the downward sloping trend line. In case it is - way towards YTD highs would be left open. Source: xStation5
Gerresheimer (GXI.DE), the German manufacturer of primary packaging products, is the best performing MDAX member following the release of Q2 earnings report. Company’s revenue reached €356.5 million marking a 7.2% YoY increase. Adjusted EBITDA also saw a single-digit increase and EPS came in at €1.87. In spite of performing better-than-expected in the second quarter of the year, the company decided not to raise its guidance and keep it intact in €1.4-1.45 billion range when it comes to full-year revenue.
According to a Bloomberg report, the US Department of Justice has launched a probe into Deutsche Bank’s (DBK.DE) dealings with the Malaysia-based investment fund - 1MDB. The fund is at the centre of money laundering scandal. The US investigators will look into whether the German lender has breached foreign-corruption or anti-money-laundering laws when it helped the fund attract over $1 billion financing. However, it is said that 1MDB misled the Deutsche Bank during the transaction and in case it is confirmed, any liability of the German lender may be smaller.
DAX members at 9:18 am BST. Source: Bloomberg
Fresenius Medical Care (FME.DE) is the best performing DAX stock on Thursday morning. It is quite surprising given that the company received a downgrade at Kepler Cheuvreux. The financial services firm lowered recommendation for the stock from “buy” to hold” and set the price target at €70. The German company tries to recover from a Tuesday’s plunge that was triggered by the announcement that the US will encourage patients to undergo kidney dialysis at home rather than at dedicated clinics. Fresenius Medical Care operates a network of such clinics in the US.
Covestro (1COV.DE) can be found among DAX biggest laggards today. The stock is pulling back following a downgrade at Lampe. Lampe’s analysts maintained “hold” rating for the stock but lowered price target from €52 to €44. The decision was reasoned with lacklustre Q2 earnings of BASF, another German chemical company. Lampe now see company’s full-year EBITDA at around €1.7 billion, down from €1.8 billion previously.
