German equities were under pressure on Tuesday as rising oil prices weighed on sentiment. The Dax was down modestly at 25,975 points in early afternoon trade, having largely recovered losses seen earlier in the day. Traders described a quiet session with low turnover.
Brent crude, the North Sea benchmark, approached the $100 per barrel mark, with one barrel equal to 159 liters. Prices for US crude WTI and European natural gas also rose sharply. Dealers cited further escalation in the Middle East, including attacks by Yemen's Houthi militia on Saudi Arabia, as a factor behind the gains. Saudi Arabia, the Gulf region's largest oil producer, halted output at some facilities near the Yemen border.
Jürgen Molnar of Robomarkets said the ongoing Middle East conflict was keeping inflation concerns alive, which he said could lead markets to price in higher interest rates for longer. He called the oil price the thermometer for equity markets.
The MDax index of mid-cap stocks rose 0.5% to 32,560 points, supported by gains in heavyweight names including Porsche AG, Knorr-Bremse and DWS. The Euro Stoxx 50 was also modestly lower, in line with the Dax.
Stock-specific commentary drove moves in individual shares. Fresenius shares rose almost 4% to lead the Dax after UBS said the healthcare group had nearly 30% upside potential and maintained a buy recommendation. Infineon shares fell more than 4% after Morgan Stanley downgraded the chipmaker, citing limited near-term upside for market expectations.
Citigroup buy recommendations lifted Kion shares by 6.4% and Nordex shares by 1.4%. Kion was the top gainer in the MDax. Shares of asset manager DWS rose 2% after US bank Jefferies issued a buy recommendation; DWS shares have gained almost 37% since the start of the year.
Among smaller SDax stocks, Hornbach Holding jumped 5% to its highest level since the end of last year, after the hardware-store group reported robust demand in its second fiscal quarter.
