German equities extended gains on Tuesday as the DAX climbed 0.57% to 26,255 points, following Monday’s close above the 26,000 mark. The eurozone’s Euro Stoxx 50 rose 0.5%, while the MDax of mid-cap stocks advanced 0.66% to 32,242.
The advance came as the Ifo Institute’s business climate index, Germany’s leading economic barometer, improved for a second consecutive month in August. The reading exceeded analyst forecasts, signaling a rebound in business sentiment despite ongoing geopolitical tensions and recent drought conditions. Earlier data revisions showed the country’s gross domestic product grew 0.3% quarter-on-quarter in Q2, up from the prior estimate of 0.2%, marking the third straight quarter of expansion.
Oil prices continued to decline, providing additional support to equity markets. U.S. crude futures fell as remarks from Treasury Secretary Scott Bessent did not outline specific measures to escalate economic pressure on Iran, despite prior threats of isolating Tehran from the global economy. The geopolitical backdrop remains a key risk factor for energy markets.
Chip stocks rebounded ahead of Nvidia’s earnings release on Wednesday, with Infineon and Süss MicroTec gaining 2.4% each. The AI-driven rally persisted as UBS raised its global AI investment forecast for 2027 to $1.2 trillion. Siemens Energy advanced 2.2% after Bloomberg reported Goldman Sachs had been retained to explore a potential majority sale of the company’s steam turbine business, with indications valuing the unit at over €10 billion.
Scout24 led gains in the DAX, reaching its highest level since early February with a 3% rise. In the MDax, Deutz surged more than 8% after Kepler Cheuvreux and Oddo BHF upgraded price targets, citing the engine manufacturer’s expansion into defense alongside its core business. Conversely, Gerresheimer slumped 7% after interim CEO Uwe Röhrhoff stepped down.
