Summary
- US Justice Department approves Sprint merger with T-Mobile
- Deutsche Boerse (DB1.DE) drops bid for Refinitiv
- Volkswagen (VOW3.DE) declines as Traton earnings hint at prevailing weakish demand
European stock market indices launched new week in mixed moods as investors are positioning for the busy week ahead. Shares from the United Kingdom are outperforming the most with FTSE100 (UK100) raising around 80 basis points at the top of the first trading hour. On the other hand, some weakness can be spotted in France, Switzerland and Poland. Financial stocks and telecom companies are gaining the most while automotive shares are the biggest laggards.
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Deutsche Telekom (DTE.DE) bounced off the support at €14.65 handle, marked by the local high from late-April 2018. The stock opened above the 200-session moving average (purple line) today and quickly surged towards the 50-session moving average (green line). The latter moving averages is the final resistance level ahead of the resistance zone ranging above €15.50 handle that has limited upward moves over the past few months. A break above the 50-session moving average could encourage bulls to be more active in the following days. Source: xStation5
US Justice Department gives green light to the merger of Sprint and T-Mobile
Deutsche Telekom (DTE.DE) can be found among the best performing DAX stocks at the beginning of the new week. The stock is benefiting from favourable decision related to merger of T-Mobile, a subsidiary of the Deutsche Telekom, and Sprint, the US telecom. The merger has finally received an approval from the Justice Department clearing one of the major hurdles towards the tie-up. The two companies committed to some divestments, including prepaid brands and spectrum business, in order not to threaten competition. Moreover, companies promised to build a 5G network that will cover 97% of the US within three year and 99% within the next six year.
DAX members after the first hour of trade. Source: Bloomberg
Other company news
According to the Handelsblatt report, Deutsche Lufthansa (LHA.DE) is considering shifting corporate structure to a holding company. The move is said to reduce complexity and make the company more similar to holdings like International Consolidated Airlines Group or Siemens. However, Lufthansa did not comment on the news so far. One should keep in mind that the German carrier will present earnings tomorrow and more details on the matter may be announced then.
Deutsche Boerse (DB1.DE) is trading lower on the first day of a new week. The company announced that it no longer seeks to buy foreign exchange unit of Refinitiv, a global provider of financial markets data. The German stock exchange operator dropped the bid after London Stock Exchange (LSE.UK) submitted a bid for the whole Refinitiv over the weekend. LSE wants to acquire Refinitiv for $27 billion, including debt.
Volkswagen (VOW3.DE) is also trading lower today. The German carmaker underperforms after Traton, its subsidiary, announced earnings for the first half of the year. Traton managed to increase operating profit by around 25% in the first six months of 2019. However, it was not enough to win shareholders’ appeal as order intake declined 6% hinting at prevailing weak demand.
Volkswagen (VOW3.DE) failed to break above the €160 handle in the previous week and saw quite a steep downward move later on. The stock is pulling back into the recent trading range today after Traton earnings report highlighted weak demand. With lack of any near-term catalysts, the stock may continue to move sideways in the €138-156 range. Source: xStation5
