DE30 recovers above 15,300 pts

• Stocks in Europe trade higher

• DE30 recovers above 15,300 pts

• SAP released Q2 earnings

Stocks in Europe are trading higher, extending recovery into the second day. Majority of blue chip indices from the Western Europe trade over 1% higher. German DAX (DE30) can be seen as a laggard as it trades "only" 0.7% higher on the day. Economic calendar for today is almost empty and there are no major releases scheduled.

Source: xStation5

DE30 continues to recover from the sell-off that arrived on the global financial markets at the end of the previous week and at the beginning of this week. We have pointed in our yesterday's DE30 analysis that the index is reacting to Fibonacci retracements of the upward impulse launched in May and today's price actions seems to confirm it so far. The index seesawed between 50% and 61.8% retracement ahead of today's European cash session launch. A strong upward move was launched later on and the index tested 15,300 pts area near 50% retracement. DE30 managed to break above this hurdle but the move looks to be losing momentum. Having said that, a pullback and retest of 50% retracement area cannot be ruled out. On the other hand, the first level to watch in case upward move continues is resistance near 38.2% retracement (15,420 pts).

Company News

SAP (SAP.DE) reported a revenue drop to €6.67 billion in Q2 2021, down from €6.74 billion in Q2 2020. Cloud revenue stood at €2.28 billion, up from €2.04 billion in Q2 2020, while software revenue dropped from €773 to €650 million. Group's operating profit also dropped - from €1.96 billion in Q2 2020 to €1.92 billion in Q2 2021. Net income increased from €1.38 billion to €2.06 billion. Company aims for 75% of its sales to come from subscription-based services, like cloud, in 2021. Subscription-based revenue is more recurring and predictable than software-license revenue.

BMW (BMW.DE) said that ongoing semiconductor shortages are preventing around 10,000 cars from being completed at its assembly plants. Company said that chip shortages have decreased its car production by around 30,000 units so far in 2021.

Volkswagen (VOW1.DE) said that it has delivered three times more battery electric vehicles (BEVs) in the first half of 2021 than it did during the first half of 2020. Deliveries of BEVs reached 170.9 thousand in H1 2021.

SAP (SAP.DE) dropped following the release of Q2 2021 earnings data. Stock plunged at the start of today's trading and reached a daily low at around €114.70 - just slightly above the lower limit of the upward channel and 38.2% retracement of an upward impulse launched in November 2020. Stock has managed to recover part of losses and is now testing the price zone ranging around 23.6% retracement (€118.60). Source: xStation5