German equities closed the first trading day of the week higher, with the blue-chip DAX index up 0.19% at Monday's close, as the market assessed the latest economic data from the eurozone's largest economy alongside geopolitical updates.
Germany posted a current account surplus of 10.4 billion euros in May, down by 6.2 billion euros month over month. The Bundesbank attributed the latest reading to a slight increase in trade surplus in goods, alongside a swing to deficit from surplus in so-called invisible current account transactions.
Zooming out, the European Union and Bahrain launched negotiations on a strategic partnership agreement aimed at improving economic cooperation, resilience and innovation.
On the Middle East war, multiple rounds of US airstrikes on Iranian defense systems and subsequent regional retaliation by Tehran sharply escalated the conflict over the weekend.
"The European gas market continues to look increasingly vulnerable to supply disruptions from the Persian Gulf. ... EU gas storage is currently less than 52% full, compared with a 5-year average of 67%. Continued supply tightness has coincided with heatwaves across Europe, increasing gas demand for power generation," ING said.
In corporate news, Rheinmetall (RHM.F) said its share of a 15-year UK Army Collective Training System contract is worth just under 1 billion euros, as part of the involvement of its Rheinmetall Electronics UK unit with the Raytheon UK-led consortium. The German defense company will begin designing and delivering the land-based program in summer 2026. Rheinmetall was down 0.79% at closing.
Maintaining its sell rating and price target of 62 euros, mwb Research cautioned that "stalling" domestic passenger volumes make Fraport's (FRA.F) full-year 2026 targets look "increasingly vulnerable."
"Fraport's weak June and H1 traffic figures highlight a fragile domestic growth trajectory, with Frankfurt passenger volumes down 1.7% in June yoy and 0.8% in H1 yoy due to Lufthansa [LHA.F] strikes, high jet fuel prices, and geopolitical conflict in Iran. This stagnation creates an unfortunate mismatch with the April opening of the EUR 4bn Terminal 3 which adds 19m in annual passenger capacity and significantly escalates fixed costs. While a 1.0% increase in H1 group passengers offered minor cushion via international growth, performance there remains highly uneven," the research firm said. The Frankfurt airport operator gained 1.80% on Xetra, while Deutsche Lufthansa ended the session 4.14% in the red.