The German stock market recovered from its early losses on Tuesday afternoon, with the Dax index rising to 25,452 points, its highest level of the day. The recovery was supported by a slight easing of oil prices and bond yields, as well as positive statements from German Chancellor Friedrich Merz, who announced measures to alleviate high fuel prices.
The Dax index had previously fallen to its lowest level in more than seven weeks, notching 0,1 percent lower at 25,420 points. The mid-cap MDax index gained 0,3 percent, reaching 30,150 points, while the Eurozone-leading EuroStoxx 50 index declined by 0,2 percent.
In a subdued market environment, defense stocks emerged as clear winners. Factors contributing to this include supply chain issues in the US and a report suggesting Japan may increase its defense spending from 2 percent to 3,5 percent of its GDP. Shares of Rheinmetall rose 2,4 percent, while Hensoldt and TKMS gained 1,1 percent and 2,8 percent, respectively.
European steel stocks also saw gains, driven by news from China. According to a Bloomberg report, leading Chinese steel manufacturers have called for stricter production restrictions and a reduction in inventory levels. This is expected to ease price pressures in the global steel market.
The chemical sector continued its downward trend, with JPMorgan reducing its target price for Lanxess and Morgan Stanley downgrading its rating for Evonik. Lanxess shares fell 2,0 percent, reaching their lowest level since March, while Evonik shares declined by 2,0 percent. BASF and Brenntag shares also fell by around 1 percent each.
Deutsche Bank shares were negatively impacted by weak US guidance and ended as the Dax's worst performer, losing 1,9 percent. Statements from Bank of America CEO Brian Moynihan were seen as a factor in the decline, with the manager expecting revenue to remain relatively unchanged compared to the third quarter of last year.
Schott Pharma shares rose 3,2 percent, as JPMorgan upgraded its rating to "Overweight" with a target price of 27,10 euros, citing the company's growth potential.
Cewe, a photo service provider, plans to repurchase up to 150,000 of its own shares, worth up to 18 million euros, representing approximately 2 percent of the company's equity. The Cewe share price gained 1,3 percent.
Deutz secured fresh capital through a capital increase, issuing approximately 15,26 million new shares for a gross proceeds of around 179 million euros. The company aims to use the proceeds to enhance its financial flexibility for future growth opportunities. The share price fell 2,3 percent.
