DE40 drops to 1-week low

• European indices trade lower
• DE40 drops to 1-week low
• Lanxess plunges after downgrades at BNPP Exane and Jefferies

European stock market indices are trading slightly lower today. German DAX drops 0.3%, while UK FTSE 100, Dutch AEX and French CAC40 decline 0.4% each. Swiss SMI can be seen as an outperformer among European indices as it gains around 0.5% at press time. Economic calendar for today is empty. Final CPI data for April from euro area was released at 10:00 am BST, but it confirmed flash reading and, in turn, did not trigger any major market reaction.

Source: xStation5

DAX futures (DE40) continue to pullback after reaching a fresh all-time high near 19,000 pts earlier this week. Taking a look at the chart at H4 interval, we can see that the index dropped below 18,800 pts support zone yesterday and moved below 50-period moving average today (green line). Index reached the lowest level in a week. The next potential support zone to watch can be found ranging below 23.6% retracement of a recent upward impulse (18,700 pts). A point to note is that 14-period RSI indicator is closing in on the 35.0 mark, which was often associated with local lows.

Company News

Christian Bruch, CEO of Siemens Energy (ENR.DE), said that company's troubled onshore wind-turbine weakness is likely to continue. Company did not sell any of its 4.X and 5.X turbines last year as investigation is ongoing into defective parts used. However, executive sees a chance for company's offshore wind-turbine to help offset losses in onshore business.

Reuters reports that the European Union antitrust regulators are likely to veto Lufthansa's (LHA.DE) bid to buy a stake in Italian carrier ITA. Lufthansa offered some remedies last week, including an offer to keep some ITA short-haul routes, but Reuters report that those fall short of regulators' expectations.

Analysts' actions

• Lanxess (LXS.DE) downgraded to 'underperform' at BNPP Exane. Price target set at €22.00
• Lanxess (LXS.DE) downgraded to 'underperform' at Jefferies. Price target set at €22.00
• Heidelberger Druck (HDD.DE) upgraded to 'buy' at Stifel. Price target set at €1.30
• Ceconomy (CEC.DE) upgraded to 'hold' at HSBC. Price target set at €2.50
• Sartorius (SRT.DE) rated 'equal-weight' at Morgan Stanley. Price target set at €235.00

Lanxess (LXS.DE) launched today's trading with a big bearish price gap, following downgrades at BNPP Exane and Jefferies. However, stock found support in the €25.70 area and managed to recover back above 50-session moving average (green line). Source: xStation5