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European stock markets trade lower
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DE30 makes retest of 14,045 pts area
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Deutsche Bank and Commerzbank slump amid large share sale
European stock markets are trading lower on Tuesday. While majority of blue chips indices managed to bounce off the daily lows somewhat, European indices remain deep in red. German DAX is a top underperformer from Western Europe, dropping 1%. Spanish IBEX (SPA35) can be seen as a top outperformer as it trades flat at press time.
German ZEW indices for April were released today at 10:00 am BST. Economic sentiment outlook dropped from -39.3 to -41.0, better than -48.0 expected by the market. Current conditions subindex dropped from -21.4 to -30.8, also better than -35.0 expected. This is the lowest current conditions reading since May 2021 and ZEW experts noted in a commentary that current pessimism related to war uncertainty and inflation is likely to deteriorate readings further in the coming months.
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Source: xStation5
DE30 broke below the lower limit of a short-term trading range in the 14,045 pts area. Index tested 13,900 pts area later on, where declines were halted and recovery move was launched. An attempt of breaking back above the aforementioned 14,045 pts can be spotted at press time. However, if bulls fail to break through and index turns lower, it would be a classic retest following a break through a price and may signal that deeper downward move may be looming. In such a scenario, traders should focus on 13,800 pts area as the next potential support. A textbook range of the downside breakout from trading range, marked with orange box, can be found slightly below it.
Company News
Deutsche Bank (DBK.DE) and Commerzbank (CBK.DE) trade lower today. Drop was triggered by news of large share sales at both banks. An unnamed investor is selling 116 million shares of Deutsche Bank and 72.5 million shares of Commerzbank worth around €1.84 billion. Shares of both lenders trade more than 5% lower today.
BASF (BAS.DE) reported a 29% YoY drop in Q1 2022 net profit, to €1.22 billion. This is a result of a €1.1 billion charge the company took in relation to its participation in Nord Stream 2 project that was halted by the German government following the Russian invasion of Ukraine.
Evotec (EVT.DE) reported full annual results for 2021. Company reported a 23% YoY jump in revenue, to €618 million. Sales significantly exceeded the company's own guidance. Adjusted EBITDA was in-line with guidance at €107.3 million, up 1% YoY. R&D expenses reached €58.1 million. Company expects 2022 revenue to reach €700-720 million and group EBITDA to come in at €105.120 million. R&D expenses are seen in €70-80 million range.
Shares of Deutsche Bank (DBK.DE) trade almost 9% lower at press time. Stock launched today's trading with a massive bearish price gap and continued to move lower. Bulls managed to find support at the area ranging around 38.2% retracement of a downward move launched at the beginning of February. The near-term resistance zone to watch can be found near 50% retracement (€11.40 area). Source: xStation5
