HelloFresh, Siemens Energy shares sink, dragging the DAX 40 index

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on Oct 26, 2023
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  • The DAX index tumbled sharply on Thursday as the earnings season continues.
  • Siemens Energy share price plunged by more than 30% after capital raise news.
  • HelloFresh stock price tumbled after the meal kit company published weak results.

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The DAX index continued its relentless sell-off on Thursday a s investors reacted to several weak financial results. The index tumbled to a low of €14,667, the lowest level since March 2023. It has slipped by more than 11% from the highest point this year, meaning it has moved into a correction.

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HelloFresh and Siemens Energy earnings

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The DAX index was driven by two key companies on Thursday. First, Siemens Energy, the embattled wind turbine manufacturer, came under intense pressure after the company said it was in talks with investors and the government about additional capital to boost its balance sheet.

Siemens Energy has been under pressure as demand for wind energy has plateaued. A few months ago, the company warned that it would lose over 4.5 billion euros this year. In addition to slow growth in wind, the company is facing the challenge of selling faulty turbines, which it is now spending millions repairing them.

Recent news have not been positive about wind energy. For example, the latest auction of North Sea wind farms in the UK saw no bid. At the same time, several American governors warned Joe Biden that the wind sector needed more government subsidies. 

Orsted, the giant Danish company has warned that it will exit some of its locations in the US. Siemens Energy share price has collapsed by over 72% from its highest level this year and by 80% from its all-time high.

Meanwhile, HelloFresh share price collapsed by more than 125 after the company published weak results. In all, the stock has dived by more than 77% from the highest level on record and is hovering near the lowest point since 2020.

The meal-kit company said that its adjusted core profit was 69.2 million euros while active customers fell to 7.1 million. The report came a day after the company announced a big $158 million share buyback program.

HelloFresh vs Siemens Energy stocks

DAX Index forecast

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DAX chart by TradingView

On Wednesday, I warned that the DAX 40 index was at a major risk of a bearish breakdown despite the strong Deutsche Bank results. On the daily chart, the index has dropped below the lower side of the rising wedge pattern. 

It has also tumbled below the 50-day and 100-day moving averages while the Relative Strength Index (RSI) is nearing the oversold level. Therefore, the outlook for the index is still bearish, with the next key support to watch being at €14,470, the lowest swing on March 20th.

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