DE30 tests short-term downward trendline

• European indices trade higher

• DE30 tests short-term downward trendline

• Suedzucker gains after guidance upgrade

Stock market indices in Europe are trading higher on Thursday after FOMC minutes failed to provide any fresh hints on the incoming Fed's taper. Gains can be spotted almost all across the Old Continent, with Swiss SMI index (SUI20) being the only European blue chips index trading lower on the day. Dutch AEX (NED25) and Russian RTS (RUS50) are top performers, gaining over 1.3% each.

A group of renowned German institutes lowered their joint German GDP forecast for 2021. According to a new forecast, German GDP will grow by 2.4% this year, down from a previous forecast of 3.7% increase. New forecast reflects supply chain issues, including lack of spare shipping capacity, as well as rising energy prices. 

Source: xStation5

DE30 broke above the price zone ranging between 15,230 pts handle and 38.2% retracement of the downward correction started in August 2021. The upward move continues today with cash index trading over 100 points above yesterday's close already. German index is approaching a short-term technical resistance - downward trendline. Should we see a break above, attention will shift to the local high from September 30 that coincides with the 50% retracement (15,410 pts area). The upper limit of the Overbalance structure near 61.8% retracement remains a key resistance. There are no major data releases scheduled for today therefore trading may be somewhat more sentiment-driven. However, a range of Fed members will deliver speeches in the afternoon and may trigger some short-term volatility on indices.

Company News

Suedzucker (SZU.DE) boosted full-year guidance yesterday. Company expects revenue in fiscal-2022 (ends on 28 February, 2022) to reach €7.1-7.3 billion, up from previous forecast of €7.0-7.2 billion. Operating profit is expected to reach €300-400 million with the sugar unit generating anywhere from 0 to 100 million euros in operating profit. Company said that due to increased rainfall, it expects its sugar production to increase 20% this year.

Steico (ST5.DE), German provider of construction materials, rallies over 8% today after releasing preliminary results for Q3 2021. Company reported EBIT at €19 million (exp. €17.6 million) and sales of €101.8 million (exp. €97.2 million). Company expects full-year sales growth of 20%, more or less in-line with estimates.

Analysts' actions

• Symrise (SY1.DE) rated "buy" at Jefferies. Price target set at €130.00

• Zalando (ZAL.DE) downgraded to "underperform" at BofA. Price target set at €70.00

• Evonik (EVK.DE) rated "hold" at Jefferies. Price target set at €30.00

Suedzucker (SZU.DE) launched today's trading higher, following a full-year guidance upgrade. Stock was gaining as much as 4% at one point of the session but has erased big parts of the gains already. Failure to deliver a bigger upward move on such positive news hints that continuation of a sideways move in the €13.25-14.50 tradinge range may be on the cards. Source: xStation5