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DE30 breaks below lower limit of yesterday’s trading range
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Zalando (ZAL.DE) sinks after being placed lower by a major shareholders
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Lufthansa (LHA.DE) moves lower as Germany considers doubling tax on short-haul flight
European investors launched Tuesday’s trading in downbeat moods. Equity indices from the Old Continent opened slightly lower today. However, some indices managed to reverse this drop already and we are observing gains on, for example, French and UK stock markets. The German DAX keeps swinging around yesterday’s closing price of 12380 pts.
Source: xStation5
A short-term bull run on the German stock market was put to a halt this week. Yesterday’s trading range was limited by two moving averages - 50-hour SMA acting as a resistance (green line) and 100-hour SMA acting as a support (red line). DE30 is making a break lower at the beginning of today’s cash session. The next support level to watch in the short term is localized at 12325 pts handle - local lows from 12 and 16 September. When it comes to resistance levels to watch one should focus on the two aforementioned moving averages. Note that during the recent upward move, the 50-hour SMA acted as an upward sloping trendline. Having said that, in case the short-term trend is to reverse and shift downward, this moving average may act as a downward sloping trendline and a resistance.
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DAX members at 8:48 am BST. Source: xStation5
Company News
Zalando (ZAL.DE) can be found among the biggest underperformers in the MDAX index on Tuesday morning. Kinnevik, the Swedish investment company, decided to reduce its stake in the German e-commerce firm by 13.13 million shares (5.2% of Zalando’s share capital). Placement price of a stake was indicated at €42.50 or 6.5% below Monday’s closing price of €45.47. However, Kinnevik explained that this sales is a fallout of Zalando becoming its largest holding rather than changing outlook on the company. Following the sale, the investment company will still own over 25% of Zalando’s shares.
Siemens (SIE.DE) announced yesterday that it plans to acquire 100% share capital in the UK firm, Process Systems Enterprise. The German company wants to integrate Process Systems Enterprise into its process automation unit. Process Systems Enterprise is a company producing advanced process modeling software and it has been working with Siemens since June 2018. However, financial details of the transaction were not revealed.
Lufthansa (LHA.DE) is trading among DAX biggest underperformers for another day in a row. The German carrier continues to be pressured by elevated oil prices. However, there is also another factor that may be negatively impacting Lufthansa’s share price today. Bloomberg reported yesterday that the main political parties in Germany are considering doubling tax on short-haul flights. The move is said to be aimed at reducing greenhouse gas emissions. The measure will be discussed at Merkel’s cabinet meeting on 20 September.
Lufthansa (LHA.DE) is breaking below the short-term upward sloping trendline today. Note that 100-hour moving average (red line) managed to halt downward move yesterday and in today’s early trading. Having said that, €14.30 handle marked by this moving average could serve as a near-term support to watch. Source: xStation5
