The German DAX index extended its decline on Thursday, slipping 0.65% to 25,921 points by early afternoon, falling below the psychologically significant 26,000 mark. The drop reinforced a recent downward trend, though the index tested but held the 21-day moving average, a key short-term support level. The MDax for mid-cap stocks fell 0.37% to 31,703 points, while the Euro Stoxx 50 declined 0.5%.
The DAX’s recent peak of 26,573 points was reached just a week earlier, but momentum has since faded amid rising bond yields and elevated oil prices driven by geopolitical tensions in the Middle East. The escalation of the Iran conflict, including threats from U.S. President Donald Trump of unprecedented economic measures, has heightened concerns over energy supply disruptions. The Landesbank Helaba noted in a market assessment that the prospect of unrestricted shipping through the Strait of Hormuz remains uncertain, keeping energy prices elevated.
Analysts highlighted the DAX’s resilience earlier in the week despite sharp losses in Asian markets, particularly in technology-heavy equities. Frank Sohlleder of ActivTrades suggested that while the index had initially weathered the "Asia meltdown," the combination of higher energy costs and monetary policy uncertainty could yet weigh on performance. "It remains to be seen whether the DAX can stabilize or whether it will succumb to the pressure from rising energy prices and interest rate uncertainty," he said.
Corporate earnings provided mixed signals. Tonies shares initially rose after the toy company reported a surprisingly strong revenue increase, but later fell 3.3% as adjusted earnings metrics declined due to product mix effects and new U.S. tariffs. While Metzler analyst Felix Dennl noted adjusted EBITDA exceeded consensus estimates, the market reaction was muted. MWB Research’s Oliver Wojahn cited declining free cash flow as a key concern.
Analyst actions drove notable stock movements. Sartorius shares gained 3.8% after UBS upgraded the lab services and pharmaceutical supplier to buy, citing premium growth potential. Matthew Weston raised revenue and earnings forecasts through 2031 by an average of about 3%, justifying a higher valuation. Continental shares rose 1% after JPMorgan’s Jose Asumendi upgraded the tire maker and rival Michelin to overweight, citing robust profitability in the tire segment and aligning estimates with recent monthly sales data.
Conversely, Brenntag shares dropped 3% to €59.80 after Bank of America resumed coverage with an underperform rating and a €55 price target, arguing that extraordinary wartime-related profits are unsustainable. The bank also expressed surprise that consensus earnings forecasts for 2027 remained stable, while it expects savings to fall short of offsetting the loss of windfall gains. Ströer shares fell 3.1% after Kepler Cheuvreux withdrew its buy recommendation, citing a lack of near-term catalysts beyond a potential takeover bid from financial investors. Reports in May indicated U.S. private equity firm Blackstone had withdrawn interest in acquiring the German outdoor advertising group.
