German stocks were downbeat on Wednesday, with the blue-chip DAX index 0.17% in the red at closing, as investors assessed the latest economic data prints that hit the market.
Final data from Destatis confirmed that annual inflation in Germany increased to 2.8% in July from 2.3% in June. The core inflation rate, which excludes food and energy prices, stood at 2.4%, down from the previous 2.5%.
Meanwhile, the country's current account surplus totaled 19 billion euros in June, up by 10.1 billion euros from the previous month, mainly attributed by the Deutsche Bundesbank to an increase in merchandise trade surplus and a turnaround into a surplus in so-called invisible current account transactions.
Zooming out to the US, the annual inflation rate edged down to 3.4% in July from 3.5% a month before, while the annual core inflation rate declined to 2.5% from 2.6%.
On the corporate front, TKMS (TKMS.F) shares jumped 9.10% at closing as it further raised its fiscal 2026 guidance, including expectations of annual sales growth between 10% and 12%, against its previous forecast of 2% to 5%. For the first nine months of the fiscal year, the German naval company's sales climbed 19% year over year to 1.89 billion euros, mainly driven by the scheduled execution of its high order backlog.
"The systematic and consistent execution of our order backlog remains a top priority for TKMS. The strong sales and profitability trends in the first nine months of the current fiscal year confirm that we are on the right track," Chief Financial Officer Paul Glaser said. "In light of these encouraging developments, we have decided to adjust our full-year guidance for sales, adjusted EBIT, and adjusted EBIT margin for fiscal year 2025/26. We fully reaffirm our medium-term targets, including the further increase in the margin to over 7%."
Hannover Re's (HNR1.F) group net income for the first half rose to 1.4 billion euros from the year-ago 1.3 billion euros, while its gross reinsurance revenue fell to 12.9 billion euros from 13.3 billion euros. At unchanged exchange rates, the company said reinsurance revenue growth would have reached 0.7%. It also reaffirmed its full-year 2026 outlook, saying it is on track to achieve its group net income target of at least 2.7 billion euros. The stock was up 0.16%.
Investors received mixed signals on the geopolitical front, with reports suggesting progress toward easing tensions around the Strait of Hormuz offset by fresh security concerns. Pakistan's defense minister said the US and Iran were close to an arrangement to resume traffic through the waterway, while Qatar's Foreign Ministry said Oman and Iran were at an advanced stage of negotiations. Meanwhile, a suspected Houthi strike in the Bab el-Mandeb Strait and a reported US attack on a vessel in the Gulf of Oman added to uncertainty.