DE30 surges as risk-on moods return, Lufthansa extends flight ban

• European indices surge as declines in China are halted

• DE30 breaks above local market geometry and continues to surge

• Lufthansa (LHA.DE) to extend China flight ban until the end of February

Chinese indices halted decline today and, in turn, boosted moods in other parts of the world. European equities are surging with the majority of Western European indices trading over 1% higher. Italian and UK indices are leaders while stocks from Austria lag the most. Miners and refiners lead higher while utility companies are underperformers.

Source: xStation5

DE30 continued upward march today and managed to break above the upper limit of the local market geometry (yellow boxes) and the support zone ranging around 13150 pts handle. The index faced resistance at the 100-hour moving average (red line) but after a brief fight it has managed to break above it as well. It looks like the first area of interest for buyers could be the support zone ranging below the 13290 pts handle. The index remains within the range of the major Overbalance structure that matches the range of downward correction from early-October 2019. A bounce off the lower limit of the structure raised hope for a longer lasting rebound.

DAX members at 9:47 am GMT. Source: Bloomberg

According to recent reports, Roundup trial in St. Louis was cancelled. No details on the matter are known but it looks like Bayer (BAYN.DE) has reached settlement with plaintiff or the trial has been cancelled indefinitely.

Lufthansa (LHA.DE) said that it has decided to extend flight ban to China. Earlier, the German carrier suspended all flights to Beijing and Shanghai until February 9 but now it plans to suspend all flights until February 29.

BASF (BAS.DE) and Covestro (COV1.DE) are trading higher today. Upbeat performance can be ascribed to a statement from Germany’s Federal Waterways and Shipping Administration. The agency said that water levels at Rhine’s bottleneck of Kaub rose by over 1.3 meter over the past three days. Development lowers the risk of shipping disruptions from Covestro and BASF plants near the river.

Analyst actions

• HeidelbergCement (HEI.DE) raised to “outperform” at On Field Investment Research. Price target set at €88

• Deutsche Bank (DBK.DE) maintained a “buy” rating on Delivery Hero (DHER.DE). Price target raised to €83

Lufthansa (LHA.DE) halted decline at the support zone ranging above 78.6% Fibo level of the upward move started in August 2019. The stock attempts to bounce higher amid improved risk appetite. However, one should not forget that the carrier halted flights to China for a whole month and it is likely to be a hit to Q1 results. Source: xStation5