DE30: Indices mixed ahead of ECB decision, US GDP

• European indices trading mixed

• DE30 pulls back slightly ahead of ECB decision, US GDP report

• Q3 earnings from Airbus and Volkswagen 

European stock market indices are trading mixed on Thursday. Benchmarks from Germany, UK, the Netherlands and Spain decline while indices from France, Italy and Belgium gain. Equities from the eastern part of the Old Continent - Russia, Poland - are underperformers. European session has been calm so far and it looks like investors are awaiting a range of key events scheduled for early afternoon today:

• ECB decision - 12:45 pm BST (1:30 pm BST - press conference)

• German CPI inflation - 1:00 pm BST

• US Q3 GDP report - 1:30 pm BST 

Source: xStation5

DE30 continues to slowly drift lower. However, scale of the drop is small as the index pull back just 0.6% off the high reached on Tuesday. A sequence of lower lows and lower highs can be spotted on the H1 interval. Unless DE30 breaks below the 15,550 pts area, where the lower limit of market geometry and the 23.6% retracement of recent upward move are located, the ongoing pullback should be viewed as nothing more than a correction in the upward impulse. The index may become more volatile this afternoon at 1:30 pm BST when the US Q3 GDP report is released and tomorrow morning when the German report sees daylight. ECB decision at 12:45 pm BST may also boost short-term volatility but no major announcement is expected. The near-term resistance to watch can be found near recent highs in the 15,750 pts area, that is also marked with price reactions from late-September and early-October.

Company News

Airbus (AIR.DE) reported 6.2% YoY drop in Q3 revenue, to €10.52 billion (exp. €10.86 billion). Adjusted EBIT was 19% YoY lower at €666 million (exp. €669 million). Net income reached €404 million, up from a net loss of €767 million in Q3 2020 (exp. €362.6 million). Company said that it sees a significant improvement in jet demand and expects full-year adjusted EBIT to reach around €4.5 billion, up from previous forecast of €4 billion). Airbus continues to expect to deliver around 600 planes this year.

Volkswagen (VOW1.DE) reported 4.1% YoY drop in Q3 revenue, to €56.93 billion (exp. €54 billion). Adjusted operating profit was 12% YoY lower at €2.80 billion (exp. €2.5 billion). Company decided to lower its outlook for deliveries and expects them to be flat year-over-year in full-2021. However, Volkswagen expects revenue to be much higher in 2021 than in a year ago. The company said the semiconductor crisis, that led to massive backlogs, will ease next year and expects that availability of chips will start to improve by the end of this year.

Analysts' actions

• BASF (BAS.DE) upgraded to "buy" at Nord/LB. Price target set at €74.00

• Symrise (SY1.DE) upgraded to "hold" at Alster Research. Price target set at €116.00

• Leoni (LEO.DE) upgraded to "neutral" at JP Morgan. Price target set at €12.10

• Siemens Healthineers (SHL.DE) downgraded to "hold" at Kepler Cheuvreux. Price target set at €57.50

Airbus (AIR.DE) launched today's trading higher, following a full-year outlook upgrade. Stock bounced off the €109.00 area, marking the lower limit of recent trading range as well as the lower limit of the upward channel. Today's upward move was halted by the 50-session moving average so far (green line) but the stock continues to trade above yesterday's close. Key near-term resistance zone can be found in the €117.50 area - the upper limit of recent range. Source: xStation5