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Stocks in Europe trade higher
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DE30 makes failed attempt of breaking above 15,700 pts
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SPD likely to enter coalition with Greens and Free Democrats
In spite of a mixed trading in Asia, stock markets in Europe launched a new week with bullish price gaps. German DAX and Spanish IBEX can be found among the best performing blue chips indices from the Old Continent, gaining over 0.9% each. Stocks from Switzerland lag with SMI being the only large-cap European index to trade lower on the day.
German election results showed a win for the SPD and its leader Olaf Scholz. SPD received 25.7% support and Scholz has already said that it received a mandate to form a government. The SPD leader also said that he sees a possible coalition agreement with Greens (14.8%) and Free Democrats (11.5%) while the previous ruling party - CDU/CSU - should stay in the opposition. Coalition of SPD, Greens and Free Democrats is seen as a rather neutral option for the stock markets. However, good result of Greens hints that some more eco-friendly agenda will be pushed and it may have an impact on related stocks.
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Source: xStation5
DE30 climbed overnight and tested the 15,700 pts mark this morning. However, bulls were unable to hold in the area for long and a small pullback occurred later on. Taking a look at the H4 interval, we can see that the index is currently struggling to stay above the price zone marked with the 61.8% retracement of August-September drop and the downward trendline. Should the ongoing pullback deepen, the index may once again revisited a support marked with the 50% retracement near the 15,500 pts handle. On the other hand, should bulls regain ground and take back control over the market, a move above the aforementioned trendline may be on the cards. In such a scenario, the nearest resistance zone to watch can be found near the 78.6% retracement (15,800 pts area).
Company News
According to a Bloomberg report, Allianz (ALV.DE) is in talks for a reinsurance deal that would include a large part of its US life insurance business. The goal of the move is to free up billions of dollars in capital. Private equity groups are said to be among interested parties. Allianz declined to comment on the matter at this point and Bloomberg report did not specify financial details of talks.
Deutsche Post (DPW.DE) said that it plans to increase prices for shipping parcels for business customers, starting from January 1, 2022. Price hike will impact customers with fixed shipping prices and those with customized contracts alike. Deutsche Post does not plan to increase prices for private customers and its DHL Express services at this point.
Vonovia (VNA.DE) announced that it has reached a 50% threshold needed to acquire Deutsche Wohnen (DWNI.DE).
Vonovia (VNA.DE) is one of the best performing DAX members today, following announcement of reaching the required threshold for Deutsche Wohnen takeover. Stock opened with a large bullish price gap today and continued to move higher until it broke above the 200-session moving average (purple line). The near-term resistance to watch can be found in the €56.40 area and is marked with the 50-session moving average (green line) and the 23.6% retracement of the post-pandemic recovery move. Source: xStation5
