DE40: European markets under selling pressure

• KfW sold 110 million shares in Deutsche Telekom AG on Monday
• AP Moeller Maersk raised its forecast for 2024

General market situation:

Tuesday's session on European markets brings sizable declines in the quotations of most stock indices. Nearly 1.1% declines are currently observed on the German DAX. At the same time, the French CAC40 is losing 0.8%, the British FTSE 100 is losing 0.5%, and the Polish WIG20 is down nearly 2.3%. We are not seeing much movement in the US yield market at this point. Overall, capital seems to be flowing into safe-haven currencies, the franc, the dollar and the Japanese yen at the moment. The most important macro readings of the day will be durable goods orders and JOLTS data.

Volatility currently observed in the DAX index. Source: Bloomberg Financial LP

Germany's benchmark DE40 is down nearly 0.98% during today's session. The index continues to remain in the structure of the downward trend initiated on May 16. The continuation of the downward trend today led to the testing of a historically important support level in the zone of the 50-day exponential moving average (blue curve on the chart). Locally, the most important resistance all the time remains the historical peak at the level of 19,000 points, as well as the zone of 18,840 points, which is close to the current quotations (the index has violated this zone several times, and it has been a point of both support and resistance in the past). Source: xStation 5

News:

Allianz (ALV.DE) shares are losing more than 3.5% in today's session after Citi downgraded its recommendation on the company's shares to “neutral” from “buy.” The bank's analysts said Generali and Axa have greater capital flexibility over a three-year horizon, which is expected to be at least partially realized. The target price was set at 283 euros per share. 

Bernstein initiated analyst coverage of Continental AG (CON.DE) with an “underperform” recommendation. Target price set at 54 euros. The shares are currently losing 1.5%. 

State-owned bank KfW sold 110 million Deutsche Telekom AG (DTE.DE) shares worth €2.5 billion to institutional investors on Monday. The Finance Ministry said the net proceeds will be used to strengthen the equity of state-owned rail operator Deutsche Bahn AG and expand Germany's rail infrastructure. The combined shareholding of KfW and the government is now 27.8% (maintaining its status as Deutsche Telekom's largest shareholder).

AP Moeller Maersk (MAERSKA.DK) raised its forecast for 2024, but bank analysts suggest that the stock's recent rise already takes into account the new data. The stock has erased early gains and is currently trading in the zone of yesterday's closing levels. 

ANNUAL FORECAST

• Underlying ebitda of $7 billion to $9 billion, previously estimated $4 billion to $6 billion, analysts estimated $5.86 billion

Other news coming out of individual companies in the DAX index. Source: Bloomberg Financial LP