German equities advanced on Tuesday, with the Dax closing 0.61% higher at 26,266.14 points, narrowing the gap to its record high of 26,574 points set nearly two weeks ago. The MDax for mid-cap stocks rose 0.74% to 32,267.44, reflecting broad-based gains across the market.
The positive momentum followed stronger-than-expected August data from the Ifo Institute’s business climate survey, a key German economic barometer. Economists had anticipated a decline, but the index improved, signaling a rebound in activity despite ongoing risks from the Iran conflict and recent drought conditions. Germany’s gross domestic product also posted a slightly better-than-initial estimate for the second quarter, marking three consecutive quarters of growth.
Ralph Solveen, economist at Commerzbank, attributed the improvement to stronger foreign demand and projected higher government spending in the coming quarters.
Declining energy prices provided additional support to equities. Oil and gas costs fell, reducing cost pressures on businesses and consumers alike. The broader Euro Stoxx 50 index ended modestly higher, while non-eurozone benchmarks in Zurich and London outperformed. In New York, the Dow Jones Industrial Average held steady at the European close, while the tech-heavy Nasdaq 100 advanced.
Chip stocks showed signs of recovery ahead of Nvidia’s quarterly earnings release on Wednesday. Infineon and Süss MicroTec gained 1.3% and 1.5%, respectively. Siemens Energy shares rose 2.7% after Bloomberg reported the company hired Goldman Sachs to explore a majority sale of its steam turbine business, with potential valuations exceeding €10 billion. The plans are not new, but renewed investor interest in the division has supported the stock.
Adidas and Puma declined 1.7% and 1.2% after Dick’s Sporting Goods lowered its guidance, citing weak performance at the recently acquired Foot Locker chain. Deutz surged over 11% in the MDax after Kepler Cheuvreux and Oddo BHF raised price targets, citing growth in its core engine business and expansion into defense.
Investors will monitor key events later this week, including Nvidia’s earnings and a speech by Federal Reserve official Kevin Warsh at the Jackson Hole symposium.
