DAX 40: China ends initial euphoria; European stock markets under pressure 📉

• European indices under pressure
• Disappointment with NDRC in China causes setback in Asia
• Samsung expects operating profit to decline for the quarter

General market situation:

Tuesday’s session on European stock markets led to a fall in most indices. The German DAX is currently down 0.1%. The British FTSE 100 index falls by more than 1.05%. France’s CAC 40 fell 0.58%. Investor attention today is focused on corporate information, in particular on the Chinese issue, where the failure to meet expectations for new economic stimulus packages has caused a significant decline in assets associated with this market.

Volatility is currently observed in the European market as a whole. Source: xStation5

The German benchmark DAX 40 index traded about 0.27% higher during Tuesday’s session, despite the DAX falling on the spot market. It appears that the key support points for the broad uptrend remain the recent peak (19,000 points) and the 50-day EMA (blue curve on the chart). The most important resistance remains the all-time high around 19,650 points. Source: xStation

News:

As mentioned above, investors’ attention is once again focused on China. It is the sentiment around this market that is putting pressure on European companies today. Let us remind you that the Hang Seng index ended today’s session with a decline of almost 10%, as the market was disappointed by the lack of new incentive programs from the Chinese authorities. The National Development and Reform Commission (NDRC) press conference did not provide the additional financial support that investors were hoping for. This was especially surprising as China had previously announced its strongest stimulus measures since the pandemic, such as cheap loans for companies to buy back their own shares.

In response to this information, fashion companies that generate most of their profits in China find themselves in a particularly difficult situation today. Additionally, the local auto sector is under significant downward pressure due to the trade war between the European Union and China.

Additionally, South Korean tech giant Samsung Electronics (SMSN.UK) announced today that it expects lower-than-expected third-quarter earnings. In its quarterly forecast, the world’s largest memory chip maker said operating profit for the quarter ending in September is expected to be about 9.10 trillion won, up from 2.43 trillion won a year earlier. Analysts surveyed by LSEG expected operating profit of 11.456 trillion won. The company’s London Stock Exchange-listed shares are currently down 1.5%.

More news from individual DAX companies. Source: Bloomberg Financial LP.