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DAX Index Rallies Amid Latest German Manufacturing, Retail Sales Data

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German shares jumped during the first trading day of the month, with the blue-chip DAX index up 1.46% at Monday's close, as the market assessed fresh domestic manufacturing and retail sales figures against ongoing developments in the US-Iran conflict.

According to S&P Global, the final headline German manufacturing PMI came in at 52.2 in July 2026, as expected, and above the previous month's 50.3, marking the joint-highest reading since May 2022.

"Germany's manufacturing sector made an impressive start to the third quarter, with a notable improvement in export sales helping drive the strongest production growth in nearly four-and-a-half years. An easing of cost inflation to the weakest seen since the outbreak of the Middle East war, primarily linked to the drop in oil prices through June and into early July, was likely a supporting factor too," S&P Global Market Intelligence Economics Associate Director Phil Smith said. "Given the volatility in oil prices in recent weeks and the still highly uncertain situation in the Middle East, it's difficult to see this kind of performance being sustained without a resolution to the hostilities."

In other local economic news, Destatis reported that German retail sales dropped 1.1% month on month in June, compared with a revised 1.2% growth previously and the expected 0.4% dip. Annually, retail sales were down 0.2%, against a revised 2.1% increase earlier.

On the geopolitical side, Reuters reported that Iran's Foreign ⁠Ministry spokesperson Esmail Baghaei denied US President Donald Trump's statements regarding scheduled negotiations for Monday, saying no talks are planned after Trump abruptly called off threatened military strikes. Tehran's spokesman added that the only active discussions are with Oman about the management of the Strait of Hormuz.

In corporate news, Beiersdorf (BEI.F) tumbled 1.93% and became one of the index's biggest losers, as the German personal care products manufacturer now anticipates its full-year 2026 organic sales to fall by a low single digit amid expectations of persistent market volatility. The company previously projected flat to slightly higher sales.

Meanwhile, Deutsche Bank Research raised its price target for Siemens AG (SIE.F) to 270 euros from 260 euros and maintained its hold rating, noting the performance of the German technology group's peers.

"In this short note, we discuss the (disappointing) results from Healthineers [SHL.F] and the (positive) read-across from Siemens' peers in the automation and electrification domains. We now expect Siemens to beat on orders across all four divisions this quarter... Overall, we anticipate that management will likely upgrade its EPS guidance by c.5% to a new range of EUR11.3-11.7 versus EUR10.7-11.0 previously (including EUR0.15 from SHL tariff refunds), with the Street sitting at EUR11.3," the research firm wrote. Siemens climbed 0.94%, while Siemens Healthineers rose 6.10% at the end of the trading day.

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