DE30 swings in a narrow range

• European markets trade mixed

• DE30 trades in 13,890-13,950 pts range

• Daimler, MTU Aero and Airbus released earnings reports

Stock markets in Western Europe are trading mostly lower today. However, German DAX (DE30) is an exception as it posts a 0.2% gain at press time. Polish WIG20 (W20) is the best performing European blue chips index gaining 1.2%. Miners are the best performing group of stocks in the pan-European Euro Stoxx 600 index, followed by retailers. Banks, food companies and the healthcare sector underperform the most.

Source: xStation5

DE30 broke below the 13,950 pts support zone and just as we have hinted in our yesterday's analysis, the index moved lower to the next support at 13,890 pts. DE30 has been range trading between 13,950 and 13,890 pts since. Break above either the upper or lower limit of the range would be a signal for a bigger move in that direction. In case of a break above the upper limit, the index could jump towards the 14,035 pts area, where the 200-hour moving average (purple line) and local peaks February 11 and 12 can be found. On the other hand, dropping below 13,890 pts would pave the way for a test of the 38.2% retracement of the upward move started at the end of January (13,845 pts). Today's ECB minutes release is likely to be a non-event and should not have a major impact on the stock markets.

DAX members at 9:52 am GMT. Source: Bloomberg

Company News

Daimler (DAI.DE) announced an increase in annual dividend per share from €0.90 to €1.35, above €1.10 expected by the markets. Moreover, the German automaker said that it expects 2021 sales and EBIT rise significantly compared to 2020 levels. Daimler released a full-2020 report today that was in-line with preliminary earnings released at the end of January.

MTU Aero (MTX.DE) reported a 14% YoY decline in 2020 sales, to €3.98 billion. Adjusted EBIT and adjusted net income dropped 45% each to €416 million and €294 million, respectively. EBIT margin declined from 16.4% in 2019 to 10.5% in 2020. Dividend per share was announced at €1.25. Company said that it expects 2021 EBIT margin in the 9.5-10.5% range while revenue is forecast to come in between €4.2 and €4.6 billion.

Airbus (AIR.DE) reported results for the Q4 2020 and full-2020 today. Company said that sales reached €19.75 billion (exp. €18.73 billion) while adjusted EBIT came in at €1.83 billion (exp. €1.65 billion). Company generated €4.9 billion in free cash flow during the final quarter of 2020. However, for the full-2020 company reported a negative free cash flow of €6.94 billion. Full-year adjusted EBIT reached €1.71 billion while sales reached €49.91 billion. Airbus decided not to pay a dividend for 2020 and provided a cautious outlook for 2021 - company expects deliveries to remain at 2020 level (566 jets). Company also said that travel recovery was halted in Q4 2020.

Thyssenkrupp (TKA.DE) announced that it has ended talks with Liberty Steel Group over sale of Thyssenkrupp's steel division. German company said that positions of two companies were far apart and that it will try to make the steel division sustainable on its own.

In spite of releasing a decent earnings report, shares of MTU Aero (MTX.DE) are trading lower today. Investors seem to be disappointed with guidance for 2021. Stock is testing support zone at €190, marked with the 50% retracement of the February-March 2020 decline. In case we see a break below this support, a way towards the upper limit of the June-November 2020 trading range at €168.20 (38.2% retracement) will be left open. Source: xStation5