DE30: European stocks extend gains

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Stocks in US and Europe advanced while Asian session was muted due to Lunar New Year holiday  
DAX (DE30 on xStation5) halted yesterday’s declines at 12355 pts support level  
Allianz (ALV.DE) reported its earnings for Q4 2017  
 
Benchmarks from Wall Street once again managed to closed higher. That was the fifth consecutive US session ending in green. All three major US benchmarks managed to post gains exceeding 1% with Dow Jones (US30) adding 1.23%, S&P 500 (US500) 1.21% and Nasdaq (US100) surging 1.58%. This means that so far US equities managed to pare over 60% of losses made since the last peak. Asian session was quite muted as stock markets in China, South Korea, Hong Kong and Singapore were closed for the Lunar New Year holiday. They will remain closed until 21st of February. In Japan both yen and Nikkei 225 (JAP225) gained as Prime Minister Shinzo Abe nominated Haruhiko Kuroda to govern the Bank of Japan for another five-year term. In Australia S&P/ASX 200 (AUS200) closed 0.08% lower.


Following upbeat moods seen yesterday in the US European stock markets set for another day of gains. In the first hours of session all the major benchmarks from the Old Continent has traded higher with gains ranging from 0.6% to even 1.5%. Among the leading sectors one can find utilities and telecommunication while the stocks related to media underperform. The Euro Stoxx 600 index is heading for the best weekly gain in over a year. When it comes to politics European traders may want to stay cautious in the afternoon as Angela Merkel and Theresa May will hold Brexit talks in Berlin. Prior to this event Chancellor Merkel will meet with Italy’s PM Paolo Gentiloni and Poland’s PM Mateusz Morawiecki. Elsewhere, UK retail sales reading heavily missed expectations of 2.5% YoY showing value of 1.6% YoY. After two hours of trade the German DAX (DE30) and the French CAC 40 (FRA40) have traded 1% higher, whilst the UK FTSE 100 (UK100) has gained 0.8%. The broad index of European shares Euro Stoxx 600 has advanced over 1%.
 
DE30 halted yesterday’s declines at 12355 pts support level. Will bulls manage to close today’s candlestick above 8-session moving average?


Taking a look at the DE30 daily chart one can see that bulls failed to close yesterday’s candlestick above the 8-session moving average. The benchmark retreated but the decline was halted by the support level at 12355 pts. As today’s session is concerned the German index is trading higher so far. If the current sentiment prevails we may see the price move closer to the resistance level at 12645 pts. A notch above this level lies 21-session moving average thus traders should be aware that price action may also happen in the vicinity of this barrier. The case for bears might be closing today’s candlestick below 12355 pts after they failed to do so yesterday.
All of the DAX components have gained in the early trading.


Company News
Europe’s biggest insurance company Allianz (ALV.DE) has just reported its earnings for the fourth quarter of 2017. The company’s revenue reached 31.676 billion euros beating analysts’ estimate by 2.65%. On the other hand, Allianz missed the earnings estimate by 17.72% showing a value of 3.24 euros per shares. However, the worse-than-expected income can be accounted to the introduction of US tax reform what is a one-time event. Moreover, the company has decided to raise its dividend payout to 8 euros per shares against 7.9 euros per share expected. After two hours of trade Allianz has traded 0.15% higher.