German Equities Slide 1.1% On Geopolitical Risks, Economic Headwinds

(RTTNews) - German stocks fell on Tuesday, weighed down by concerns about inflation and interest rates as oil prices climbed higher and bond yields rose amid the ongoing conflict between Iran and the U.S. Weak German retail sales data and a report showing an acceleration in Eurozone inflation hurt as well.

Brent crude futures climbed to $92.55 a barrel today, gaining about 2.3%.

Germany's 30-year government bond yield rose to a fresh 15-year high as traders assessed Middle East tensions. U.S. non-farm payrolls data, due later this week, is expected to provide some clues on the Federal Reserve's rate trajectory.

The benchmark DAX, which dropped to a low of 25,925.18, was down 293.04 points or about 1.1% at 25,988.45 a few minutes past noon.

MTU Aero Engines, SAP and Deutsche Bank shed 2.7%-3%. Rheinmetall, BMW, Vonovia, Mercedes-Benz, Commerzbank, Volkswagen and Deutsche Telecom dropped by 2%-2.5%.

Continental, Heidelberg Materials, Adidas, Scout24 and Siemens lost 1%-1.7%. Daimler Truck Holding and GEA Group also drifted notably lower.

Symrise gained 1.3% after it agreed to sell AmeriTerpenes LLC, its terpene ingredients business, to international private equity investor Mutares SE & Co KGaA.,

Merck climbed 1.7%. RWE, Qiagen, Brenntag, Siemens Healthineers and Munich RE gained 0.5%-1.2%.

Data from S&P Global showed the S&P Global Germany Manufacturing PMI was revised slightly higher to 54.3 in August from a preliminary of 54.1, compared to 52.2 in July. The reading showed that factory growth improved for a third straight month, reaching its strongest level since May 2022.

Data released by Destatis showed Germany's retail sales declined unexpectedly in July, falling 3.4%, on weaker food and non-food store sales. Retail sales remained flat in June. Sales were expected to rise 0.4% in July.

On a yearly basis, retail sales dropped 2.5%, in contrast to the 0.6% increase in June.

Eurozone inflation accelerated to the highest level in nearly three years in August, reinforcing expectations for an interest rate hike at the European Central Bank's meeting next week. Inflation advanced to 3.3% in August, as expected, from 2.9 % in July, flash data from Eurostat revealed. The rate was the highest since September 2023, when inflation was 4.4%.