EU indices up TA focus on BHP Group

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By :  ,  Financial Analyst

EU indices up | TA focus on BHP Group

Yesterday, European stocks were broadly higher. The Stoxx Europe 600 Index rose 0.75%. Germany's DAX 30 jumped 0.99%, France's CAC 40 climbed 0.47%, while the U.K.'s FTSE 100 eased 0.46%.

69% of STOXX 600 constituents traded higher yesterday.
74% of the shares trade above their 20D MA vs 70% Friday (above the 20D moving average).
51% of the shares trade above their 200D MA vs 49% Friday (above the 20D moving average).

The Euro Stoxx 50 Volatility index eased 1.37pt to 24.21, a new 52w high.

3mths relative high: Chemicals, Industrial, Basic Resource
3mths relative low: Retail, Pers. & House. Goods, Food & Beverage, Media, Energy

Europe Best 3 sectors
technology, construction & materials, health care

Europe worst 3 sectors
travel & leisure, energy, media

The 10yr Bund yield rose 2bps to -0.45% (below its 20D MA). The 2yr-10yr yield spread rose 1bp to -21bps (above its 20D MA).

UK 07:00: Jun Public Sector Net Borrowing, exp.: £-54.5B
GE 10:40: 2-Year Schatz auction, exp.: -0.69%
UK 10:45: 30-Year Treasury Gilt auction, exp.: 0.67%

In Asian trading hours, EUR/USD held gains at 1.1458 and GBP/USD rose further to 1.2675. Earlier today, media reported that European Union leaders have reached an agreement on a 750 billion euros stimulus package. USD/JPY eased to 107.20.

Spot gold was flat at $1,817 an ounce.

BHP Group, a giant mining group, released a full-year production report: "Total petroleum production decreased by 10 per cent to 109 MMboe, (...) Volumes are expected to decrease to between 95 and 102 MMboe in the 2021 financial year, (...) Total copper production increased by two per cent to 1,724 kt. Production of between 1,480 and 1,645 kt is expected in the 2021 financial year. (...) Total iron ore production increased by four per cent to record 248 Mt (281 Mt on a 100 per cent basis). Production of between 244 and 253 Mt (276 and 286 Mt on a 100 per cent basis) is expected in the 2021 financial year. (...) Nickel West production decreased by eight per cent to 80 kt. (...) Total nickel production is expected to increase to between 85 and 95 kt in the 2021 financial year." 

From a technical point of view, the share price stands within a bullish channel since March and has escaped from a short term lateral consolidation area. Moreover, the 20 DMA is playing its role of support. Above 1641p, look for a further advance towards the horizontal resistance of August 2019 at 1873p and 2060p in extension.

Source: GAIN Capital, TradingView

Continental, an automotive parts manufacturer, reported that 2Q preliminary organic revenue was down 39.8% on year to 6.62 billion euros and adjusted EBIT margin was -9.6%, saying the results "exceed capital market expectations".

Sartorius, a laboratory equipment supplier, announced that 1H net income rose 22.4% to 124 million euros and underlying EBITDA grew 23.5% to 294 million euros on revenue of 1.06 billion euros, up 15.9% (+16.0% at constant currency).

Remy Cointreau, a wines and spirits producer, announced that 1Q revenue declined 32.8% on year to 150 million euros, down 33.2% on an organic basis. The company said: "Following this better than expected first quarter and (unchanged) expectations of a moderate decline in the second quarter, Remy Cointreau now expects Current Operating Profit to be down 35-40% on an organic basis in the first half of financial year 2020/21 (compared with previous expectations of a 45-50% decline)."

Sartorius Stedim, a biopharmaceutical company, reported that 1H net income increased 27.7% on year to 167 million euros and underlying EBITDA rose 27.8% to 262 million euros on revenue of 869 million euros, up 22.5% (+22.0% at constant currency). The company said "management now anticipates sales growth of 26% to 30% (previously 17% to 21%)".

Novartis, a pharmaceutical giant, reported that 2Q core grew 0.4% on year to 3.11 billion dollars while operating income slid 11.7% to 2.35 billion dollars on net sales of 11.35 billion dollars, down 3.5% (-1.0% at constant currency). The company said it expects full-year net sales to grow mid single digit at constant currency and core operating income to grow low double digit at constant currency.

Givaudan, a fragrances producer, posted 1H net income increased 8.7% on year to 413 million Swiss franc and EBITDA climbed 11.2% to 734 million Swiss franc on revenue of 3.22 billion Swiss franc, up 4.1% (+4.0% like-for-like).

SGS, a testing and certification services provider, reported that net income declined 54.6% on year to 171 million Swiss franc and operating income slid 52.5% to 302 million Swiss franc on revenue of 2.65 billion Swiss franc, down 20.7% (-14.9% at constant currency).

Alfa Laval, a Swedish engineering company, announced that 2Q net income fell 8% on year to 1.30 billion Swedish krona and adjusted EBITA slid 4% to 1.80 billion Swedish krona on net sales of 10.46 billion Swedish krona, down 8% (-6% adjusted for currency effects).

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