DE30 tests 14,000 pts support zone

• European stock market indices trade higher

• DE30 tests and defends 14,000 pts area

• Porsche joins DAX index

Stock markets in Europe are trading higher in spite of a downbeat trading in Asia earlier today. German IFO indices came in above market expectations Institute's economists noting the probability of a recession has decreased. Expectations index jumped from 80.0 to 83.2 (exp. 82.0) while the Current Conditions index moved from 93.1 to 94.4 (exp. 93.5). Headline business climate index jumped from 86.3 to 88.6 (exp. 87.5). However, German IFO data was the only noteworthy release scheduled for today and now markets are left to move on news headlines. Those, however, may be rare as investors, and market alike, are getting into a Christmas lull.

Source: xStation5

After 3 days of selling, German DAX (DE30) is snapping a losing streak. Index is recovering from a failed attempt of breaking below 14,000 pts support zone and is now attempting to break above 50% retracement of the downward impulse started in late-2021. Note that price defended the lower limit of the Overbalance structure in the 14,000 pts area, signaling that uptrend is still in play and a strong recovery move could be on the cards. In such a scenario, 14,600 pts resistance zone, marked with recent local high and 61.8% retracement will be the first target for bulls.

Company News

Shares of Porsche AG (P911.DE) are trading as part of the DAX index for the first time today. Company replaced Puma (PUM.DE) in the German blue chips index. Decision was announced 2 weeks ago and became effective today, December 19.

Volkswagen stock (VOW1.DE) launched today's trading with an over-9% bearish price gap as the shares went ex-dividend to account for extraordinary dividend. Dividends is related to Porsche IPO and amounts to €€19.06 per ordinary and preffered share. Total value of payout is €9.6 billion.

Rheinmetall (RHM.DE) announced that it is expanding ammunition production capacity in Germany in order to meet higher demand amid Russia-Ukraine war and NATO stepping-up defense spending. New production facilities for medium-caliber ammunition are expected to be ready in January 2023 with production beginning a few months later.

RWE (RWE.DE) was affirmed at 'BBB+' at Fitch Ratings with a stable credit outlook. Ratings agency noted solid fundamentals, earnings and pending M&A as positive factors.

Analysts' actions

• Deutsche Boerse (DB1.DE) was downgraded to "neutral" at Credit Suisse. Price target was set at €185.00.

• Suedzucker (SZU.DE) was upgraded to "buy" at Warburg Research. Price target was set at €17.50

Shares of Suedzucker (SZU.DE) surged following an upgrade at Warburg Research. Stock trades over 5% higher on the day and breaks above €15.68 peak from July. Shares trade at the highest level since October 2020. Source: xStation5