DE30 plunges below 15,300 pts

• European markets trade lower

• DE30 drops below 100-hour moving average and continues sell-off

• BMW reported preliminary Q1 results

Most of the European blue chips indices launched today's trading slightly above yesterday's closing prices. However, upbeat moods did not last long and now declines can be spotted on stock exchanges all across the Old Continent. Spanish IBEX (SPA35) is a top laggard trading 1.7% lower at press time while Russian RTS (RUS50) is the outperformer as it trades flat.

Source: xStation5

DE30 pulled back from all-time highs yesterday. Decline was halted at 50% retracement of a recent upward impulse (15,350 pts area) and the index recovered slightly during the overnight trading. However, pressure returned following the launch of today's cash trading and DE30 broke below yesterday's low. Declines continued below 100-hour moving average (red line) and breaking below this hurdle gave a signal for sell-off to accelerate. Index broke below the upper limit of the recent trading range at 15,300 pts and is now testing 78.6% retracement near the midpoint of the range. Breaking below could trigger a drop towards the lower limit of the range at around 15,180 pts. In case the index starts to recover, the aforementioned 15,300 pts area will be key level to watch for bulls.

Company News

BMW (BMW.DE) reported preliminary results for the first quarter of 2021 yesterday after close of the session. German carmaker said that EBIT margin in the automotive segment reached 9.8%. Automotive segment EBIT increased from €229 million in Q1 2020 to €2.236 billion in Q1 2021. Financial services EBIT increased from €484 million to €787 million. Car sales increased in all regions, with the biggest increases seen in China. Results were better than expected.

K+S (SDF.DE) said that it has received approval from the US authorities for sale of its US salt business. Unit will be sold to Stone Canyon Industries. K+S said that the sale will help deleverage its balance sheet and is expected to close by the end of April 2021.

According to the Handelsblatt report, German utilities companies have approached the European Commission asking it to block state aid for coal-exit for RWE (RWE.DE). Companies said that €2.6 billion in state aid that RWE is expected to receive will distort competition.

Analysts' actions

• BASF (BAS.DE) was downgraded to "add" at Baader Helvea. Price target set at €81

• Schaeffler (SHA.DE) was downgraded to "hold" at Stifel. Price target set at €9

K+S (SDF.DE) launched today's trading higher following positive news on US salt business sale. However, the upward move was not maintained and stock has pulled back towards yesterday's closing price. Note that candlesticks with long upper wicks have heralded reversal at the beginning of April so bulls should stay on guard. Should the stock continue to move lower, zone ranging above 50% retracement of late-2020 upward impulse should be viewed as a near-term support. Source: xStation5