FRANKFURT (dpa-AFX) - The Dax abandoned a recovery attempt on Friday, significantly widening its already substantial weekly loss. By early afternoon, the German benchmark index was down 1.4 percent at 23,493 points, after having initially resisted the downward pull of the Iran war with gains in early trading. The conflict remains the dominant theme, and investors continue to react with extreme nervousness.
While U.S. assessments suggest Iran's combat power is significantly weakened, Tehran continues to expand the war across the entire Middle East. Most recently, a renewed sharp rise in oil prices caused uncertainty after the Gulf state of Qatar warned of grave consequences for regional energy commodity shipments due to the conflict. The resulting inflation risks were somewhat tempered in the afternoon by overall weak monthly labor market data.
The Dax's weekly balance is deep red, with a loss of over seven percent. To find a steeper decline, one must look back to early April, when U.S. President Donald Trump sent financial markets into turmoil with his tariff announcements.
"The attack on Iran involves risks given the scale of the military operation and the generally fragile situation in the Middle East. From an economic perspective, these risks are that oil production facilities in the region could be systematically destroyed by Iran and that the transport route through the Strait of Hormuz could remain closed for a long time," wrote Ulrich Kater, chief economist at Dekabank.
According to the expert, neither risk has materialized in the first days since the initial airstrikes. If the interpretation holds that Iran and its regional proxies are incapable of a comprehensive action, then the impact on commodity and financial markets should remain relatively moderate.
The MDax of mid-cap stocks shed one percent to 29,407 points. The Eurozone benchmark index, the EuroStoxx 50, fell by 1.7 percent.
Among individual stocks, analyst assessments drove price movements. Shares of Infineon slumped by more than five percent, making them the bottom performer in the Dax, after UBS abandoned its buy recommendation. While analyst Francois-Xavier Bouvignies remains optimistic about the chip group in the medium term, he sees immediate risks that could limit price potential. He noted that the AI revenue target through 2027 leaves little room for upside.
Bolstered by several positive analyst comments, DHL shares recovered from their significant previous-day losses, rising by over one percent. Muneeba Kayani, an expert at the U.S. investment bank Bank of America, wrote that the disruptions in freight markets caused by the Iran war play into the hands of the logistics group with its large, flexible network. On the previous day, an outlook shaped by geopolitical uncertainty had spooked investors.
As the clear laggard in the MDax, Lanxess shares plunged by more than 18 percent. The preliminary failure of the sale of the remaining stakes in the Envalior joint venture once again sparked shareholder concerns regarding the specialty chemicals group's financing./la/jha/
--- By Lutz Alexander, dpa-AFX ---
