DE30: Stocks in Europe deepen downward move

• European stock markets trade lower

• DE30 drops below 50% retracement but recovers later on

• New car registrations in Europe jumped 256% YoY in April

European stock markets followed into footsteps of their US and Asian peers and moved lower. Declines can be spotted all across the Old Continent with major indices from the Western Europe trading around 1% lower at press time. Spanish IBEX (SPA35) can be seen as the outperformer as it drops "only" 0.3%. 

Source: xStation5

DE30 continued to move lower today. German index plunged below 50% retracement of the upward move launched last week and tested support zone at 15,125 pts, marked with previous price reaction. However, bulls managed to regain control there and the index climbed back above the aforementioned retracement. Key resistance zone to watch in near-term can be found in the 15,260 pts area, where the 38.2% retracement and 200-hour moving average can be found. Traders should keep in mind that there may be a jump in volatility at 7:00 pm BST when FOMC publishes minutes from the latest meeting.

Company News

New car registrations in Europe jumped 256% YoY in April. Massive surge can be reasoned with a very low base from the previous year - car sales in April 2020 were massively impacted by the outbreak of the coronavirus pandemic. Nevertheless, sales were still 14% lower than monthly average for the decade preceding pandemic. Sales of Volkswagen Group (VOW1.DE) increased 228.4% in April and were 18.3% higher for the year-to-date period. Sales of BMW (BMW.DE) increased 197.7% in April and were 25% higher YTD. Sales of Daimler (DAI.DE) increased 274.6% in April and were 15% higher YTD.

According to the Handelsblatt report, Deutsche Telekom (DTE.DE) is mulling increasing stake in T-Mobile. Deutsche Telekom currently holds 43.3% stake in T-Mobile US (TMUS.US) but has an option to increase its holdings by an additional 8%. Deutsche Telekom declined to comment on the matter when approached by Bloomberg reporters. 

Christina Sewing, CEO of the Deutsche Bank (DBK.DE), said that the Bank's business continued to perform well in the second quarter of 2021. Sewing also said that size is becoming an increasingly important factor in the financial sector and the European banking consolidation will occur sooner or later. Executive said that he wants Deutsche Bank to play an active role in the process.

Analysts' actions:

• Commerzbank (CBK.DE) downgraded to "neutral" at Citi. Price target set at €7

• Adidas (ADS.DE) upgraded to "equal-weight" at Morgan Stanley. Price target set at €295

• Puma (PUM.DE) upgraded to "overweight" at Morgan Stanley. Price target set at €102

• Bayer (BAYN.DE) upgraded to "overweight" at JPMorgan. Price target set at €67

Deutsche Telekom (DTE.DE) painted a double top at €17.35. Stock moved lower today amid broad risk-off moods on the Old Continent. Key near-term support can be found in the €16 area, where 50% retracement of recent upward impulse and neckline of the double top pattern can be found. Breaking below could pave the way for a bigger decline with €14.63 area being the target of double top pattern. Source: xStation5