DE40: Futures remain in consolidation despite strength in defense stocks 💡

European stock indices are posting slight gains during Wednesday's trading session. DE40 contracts are currently up more than 0.1%, while EU50 is adding 0.03%. There are not many important data releases today. Investors' attention may partly turn to DOE data on US oil inventories.

Current volatility in the broader European market. Source: xStation

The German DE40 index is up 0.26% in today's session and is once again trying to break above the support zone marked by the 100-day exponential moving average (purple curve on the chart). As long as the DE40 remains above these zones, the overall upward trend (medium-term) remains sustainable in the longer term. The RSI for the last 14 days is trading at levels close to 46 points, which may indicate that current prices remain relatively close to the average dynamics of the last 14 sessions. However, it is important to note that the 50-day EMA is tilting downward, which may indicate that the short-term trend has changed to downward. Source: xStation

Company news

European defense stocks are gaining value today following Donald Trump's statements calling on NATO countries to shoot down Russian aircraft violating their airspace. The former US president also expressed a more favorable attitude toward Ukraine's chances of victory, suggesting that Kyiv could regain all territories occupied by Russia since 2022. President Volodymyr Zelensky reacted positively to these statements, calling them a “big change” in Trump's position. You can read more here.

Bechtle (BC8.DE) shares rose 4.1% and Cancom (COK.DE) shares rose 3.4% after BNP Paribas Exane expressed greater optimism about German IT vendors, counting on increased public sector spending, economic stimulus, and a computer replacement cycle. Since the end of 2023, these companies have struggled with weak economic conditions in Germany and a decline in public spending following early elections in February 2025, resulting in a series of profit warnings. As a result, BNP raised its recommendation for Bechtle to “outperform” from “underperform,” raising its target price to €47 from €36, and changed its rating for Cancom to ‘neutral’ from “underperform.”

JD Sports (JD.UK) reported adjusted pre-tax profit of £351 million in the first half of the year, down 14% year-on-year and below analysts' expectations (£364.2 million). Revenue rose 18% y/y to £5.94 billion, exceeding forecasts, mainly thanks to the Complementary Concepts segment, whose sales more than doubled to £1.57 billion. Gross margin fell slightly to 48% from 48.6% a year earlier, but remained slightly above consensus. The company announced a second share buyback program worth £100 million and maintains its FY26 profit forecast in line with market expectations. Management remains cautious about the trading environment in the second half of the year but does not anticipate a significant impact of US tariffs on results. The company's shares are currently down 1.8%.

Analyst actions: 

UPDATES:

Bechtle upgraded to “outperform” by BNPP Exane; target price €47.

Cancom upgraded to “neutral” by BNPP Exane; target price €25.

Equinor upgraded to “buy” by ABG; target price NOK 300.

DOWNSGRADES:

Evonik downgraded to “hold” by Deutsche Bank; target price EUR 16.

Porsche downgraded to “sell” by Bankhaus Metzler; target price EUR 31.

Swiss Re downgraded to “neutral” by JPMorgan; PT CHF 160.

INITIATIONS:

Var Energi received a new “buy” rating from Citi; PT NOK 46.

Other information from German companies included in the DAX index. Source: Bloomberg Financial LP