DE30: Indices trade mixed as attention turns to Fed

• European markets trade mixed

• DE30 tests 200-hour moving average

• Daimler to pay out 2021 bonuses of up to €6,000 per worker

European stock markets are trading mixed on Wednesday. Majority of indices from the Western Europe advance today, there are some exceptions - UK FTSE 100 (UK100) and Spanish IBEX (SPA35) are trading lower. Polish WIG20 (W20) is a top underperformer among European blue chips indices today, dropping over 1%. Trading is somewhat muted during the European morning hours as investors await key FOMC decision today in the evening.

Source: xStation5

DE30 deepened recent declines and tested support zone at 38.2% retracement of late-November downward move. Bulls managed to defend the area but a subsequent recovery move was halted at the 200-hour moving average (purple line). So far, volatility on the DE30 market was limited today. This can be reasoned with uncertainty ahead of the FOMC decision this evening (7:00 pm GMT). A spike in volatility is expected in the evening around decision announcement time. A more hawkish announcement than expected (i.e. dot-plot pointing to 3 rate hikes in 2022) could exert pressure on stock market indices. Two near-term zones to watch for DE30 traders are support at 38.2% retracement (15,450 pts) and resistance at 50% retracement (15,600 pts). 

Company News

Daimler (DAI.DE) announced that staff at its Mercedes-Benz brand will receive a bonus of up to €6,000 for 2021. Payouts will be made along with wages for February 2022 and around 100 thousand workers will be eligible to receive bonus. A recently spun-off Daimler Truck unit also announced that it will pay 2021 bonuses of up to €6,000.

According to a Handelsblatt report, Deutsche Telekom (DTE.DE) is set to renew a contract of its CEO Timotheus Hoettges. New contract will expire at the end of 2026. Decision will be made at a supervisory board meeting today.

Merck (MRK.DE) is reportedly planning to construct a new manufacturing plant for materials used in semiconductors in Taiwan. Company also said that it plans to increase investments in Research & Development in the country. Merck wants to spend around 17 billion TWD in Taiwan over the next 5-7 years (around 611 million USD).

Analysts' actions

• Aixtron (AIXA.DE) rated "equal weight" at Morgan Stanley. Price target set at €19.00

Aixtron (AIXA.DE) is trading higher today, following a recommendation from Morgan Stanley. Bank set a €19 price target for the stock - a premium of around 16% above yesterday's closing price. Today's jump allows the stock to move away from the support zone marked with 50% retracement of post-pandemic recovery. Key resistance to watch can be found in the €20.25 area. Source: xStation5