DE40: Porsche at its lowest level ever 🚨ASML extends dynamic growth 📈

European stock indices are down during Monday's trading session. DE40 contracts are losing more than 0.83% today, while EU50 is down 0.54%. On the data side, investors' attention will be focused today on numerous speeches by Fed bankers.

The worst performing sector is currently automotive, where downward pressure is being driven by news from Porsche, which is pushing the company's shares down 7%. The situation is similar for Volkswagen shares. On the other hand, ASML is resuming its upward momentum after Morgan Stanley's recommendation, and in Spain, investors are focusing on BBVA's new offer to acquire Banco Sabadell.

Source: Bloomberg Financial LP

Current volatility on the broader European market. Source: xStation

The German DE40 index is down 0.9% in today's session and is once again trying to break below 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 quoted at levels close to 46 points, which may indicate that the current quotations 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: xStatio

Company news

Porsche AG (P911.DE) saw its share price fall by as much as 7% today after the manufacturer announced a cut in its annual profit forecast and a freeze on plans to build a premium electric SUV. The parent company Volkswagen (VOW1.DE) lost up to 5.8%, while other premium manufacturers such as Stellantis, BMW, and Mercedes recorded declines of more than 2%. The reason for the correction is the delay in new EV models coupled with a deterioration in profitability – the profit margin for 2025 has been lowered to 0-2% from the previous 5-7%. Volkswagen has to write off €5.1 billion due to product changes at Porsche, which has also lowered its own operating margin forecast to 2-3%. Analysts, including those from Jefferies and RBC, see competitive pressure and risks to the product cycle and brand image in these decisions; they emphasize that investors are skeptical about further announcements of a recovery. At the same time, Porsche recorded an almost complete disappearance of profits in the second quarter, under pressure from weak demand in China and US tariffs. Today, Porsche shares are being withdrawn from the DAX index, which further negatively affects sentiment around the company.

The company's shares are falling to their lowest levels in history today. Source: xStation

What is more, today's news from Porsche is affecting sentiment across the entire automotive sector. Source: xStation 

ASML (ASML.NL) continues to grow, with the company's shares gaining up to 3.7% today after the third upgrade by analysts in the last month, this time by Morgan Stanley, which changed its rating to “overweight” from “equal-weight” and raised its target price to €950 from €600. As a result, ASML shares are trading at their highest intraday levels in over a year and have risen 33% since their low in early September.

Banco Sabadell (SAB.ES) shares fell 4.6% on Monday after BBVA (BBVA.ES) increased its takeover bid by about 10%, valuing the bank at €3.39 per share, which represents a small premium to Sabadell's market value. The offer provides for the exchange of one BBVA share for nearly 4.84 Sabadell shares, but analysts believe that this premium is too low for most shareholders to accept. Sabadell's management continues to reject the offer, arguing that it significantly undervalues the bank's value and prospects, and the bank itself believes in its strategy of developing as an independent entity.