German equities gained on Wednesday, closing 0.10% in the green, as the market anticipates the US Federal Reserve interest rate decision due later in the day and the formal signing of an interim US-Iran peace deal later in the week.
In a joint statement, the heads of the G7 countries welcomed the interim agreement between the US and Iran, which they noted offered an opportunity to prevent Iran from developing nuclear weapons. As they expressed their readiness to assist in the deal's implementation, the leaders also called for a ceasefire in Lebanon.
"We commit to accelerate the diversification of energy supply routes in order to reduce global vulnerability to the Strait of Hormuz and to increase our energy stocks," the leaders said in the statement issued during the G7 Summit in Evian, France.
On the economic front, inflation in the eurozone accelerated in May. According to final data from Eurostat, the euro area's annual inflation rate rose to 3.2% from 3% in April, in line with the flash estimate. Meanwhile, the core rate, which excludes energy, food, alcohol and tobacco, came in at 2.6%, above the preliminary forecast of 2.5% and the previous 2.2%.
The highest contributors for the month were services, followed by energy, food, alcohol and tobacco, and then non-energy industrial goods.
In corporate news, BMW Group (BMW.F) was the worst performer, dropping 8.34%, after cutting its full-year 2026 outlook. The downgrade includes a "significant" year-over-year decline in group pretax profit, compared with the previously expected "moderate decrease."
"BMW has issued a material guidance cut, attributing it once again to a softer market in China and the wider [Asia Pacific] region, alongside second-order effects stemming from the Middle East conflict. While a guidance revision was anticipated over the past few days, after the stock underperformed and the company cancelled a long-planned [Chief Executive Officer] sell-side meeting, we believe the magnitude of this cut is materially larger than expected - >EUR 3bn on EBIT and EUR 2bn on [free cash flow]," Deutsche Bank Research said.
The news also sent stocks of fellow German automotive companies Mercedes-Benz Group (MBG.F), Volkswagen (VOW.F), and Porsche Automobil Holding SE (PAH3.F) down 4.36%, 3.48%, and 1.96%, respectively, on Xetra.
Meanwhile, Bayer (BAYN.F) completed its acquisition of US-based Perfuse Therapeutics, fully integrating the glaucoma and diabetic retinopathy drug developer. The German healthcare and agricultural products company paid $300 million upfront, with the total deal value potentially reaching $2.45 billion pending milestone payments. Bayer was up 4.80% at the end of the trading day.