DAX Pares Early Gains, Down Nearly 0.5%; Auto Stocks Decline

(RTTNews) - German stocks pared early gains and slipped into negative territory Wednesday morning despite flash data showing the nation's private sector activity in September expanding at the fastest rate in over two years.

Oil's tumble amid easing supply concerns, along with strong economic data contributed to the positive start. However, stocks turned weak subsequently, facing stiff resistance at higher levels, as oil prices came off day's lows.

Brent crude futures fell to $97.91 a barrel as investors reacted to reports suggesting that Iran is ready to reopen the Strait of Hormuz within seven days if the United States eases military pressure and lifts its blockade on Iranian ports. Oil futures recovered to $99.30 subsequently, up slightly from previous close.

Reports that Saudi Arabia has restarted its East-West oil pipeline and is preparing to resume Red Sea oil exports from Yanbu, weighed as well on oil prices.

The benchmark DAX, which climbed to 25,730.25 earlier, was down 109.78 points or 0.43% at 25,490.23 nearly half an hour before noon.

Auto stocks Volkswagen, BMW, Daimler Truck Holding and Mercedes-Benz shed 1.3%-1.7%, contributing significantly to market's drop.

Scout24 drifted down 2.3%. Deutsche Post lost 1.4%. Allianz, Deutsche Telekom, Zalando, Adidas, Infineon Technologies and Deutsche Bank declined 1%-1.25%.

Fresenius Medical Care, Siemens Energy, E.ON, Gea Group, Henkel, Brenntag, Qiagen, Symrise and Bayer also weakened.

MTU Aero Engines climbed up 1.5%. Rheinmetall moved up 1.3% and Munich RE advanced nearly 1%. SAP, RWE, Vonovia, Hannover RE, Hochtief and Commerzbank posted modest gains.

Flash survey data published by S&P Global revealed Germany's private sector expanded at the fastest pace in 11 months in September, reflecting a renewed increase in activity across the service sector.

The composite output index climbed to 53.8 in September from 51.8 in August. This was the highest reading since last October. Economists had forecast the index to remain stable at 51.8.

"The flash data pointed to the strongest rise in business activity for almost a year, with the service sector finally rejoining manufacturing in growth territory after a quieter period that followed the outbreak of the Middle East war," S&P Global Market Intelligence Economics Associate Director Phil Smith said.

At 52.9, the services Purchasing Managers' Index hit a 7-month high from 49.7 in the previous month. The score was forecast to rise to 49.9.

The factory PMI dropped to 53.8 from 54.3 a month ago and also remained below forecast of 54.1.