Germany's blue-chip DAX index ended the last trading day of the month little changed, gaining 0.07%, after the market digested the latest eurozone inflation print and new corporate earnings and trading updates.
According to flash data from Eurostat, the euro area's annual inflation edged up to 2.9% in July from 2.8% a month ago, as expected. Meanwhile, the annual core rate, which excludes energy, food, alcohol and tobacco, came in at 2.5%, surpassing the previous and expected 2.4%.
"So, while the data for July was quite benign, there is still plenty of scope for a further increase in inflation. Especially since the Middle East war remains very unpredictable. The [European Central Bank] remains on high alert and is likely to raise rates in September again under current conditions," ING said.
Speaking of the war, Iran's Islamic Revolutionary Guard Corps claimed it targeted and stopped two tankers accused of violating passage protocols in the Strait of Hormuz. Meanwhile, US President Donald Trump convened a cabinet meeting at Camp David as he weighs his options for resolving the conflict with Tehran.
Back home and on the jobs front, the federal agency Bundesagentur für Arbeit reported that Germany's unemployment rate increased to 6.4% in July from June's 6.3%, above the market forecast of 6.3%. The number of unemployed individuals in the country rose by 6,000, compared with a 1,000 decrease earlier and the expected jump of 5,000.
In corporate updates, Siemens Healthineers (SHL.F) fell 0.91% after the German medical technology company lowered its fiscal 2026 comparable revenue growth outlook to between 3.5% and 4% from the previous target range of 4.5% to 5% on the back of its diagnostics division's performance.
Outside the main index, Siltronic (WAF.F) was up 2.91%, as Deutsche Bank Research upgraded the German silicon wafer supplier to buy from hold and raised its price target to 100 euros from 72 euros.
"The silicon wafer industry has suffered for a long time relative to the wider industry. In fact, the AI spending boom has pretty much passed it by so far given low wafer area consumed by market leaders such as Nvidia [NVD.F]. However, despite ongoing demand destruction in mainstream categories, we believe the wave of demand from agentic AI is now set to tip the 300mm wafer industry into shortage conditions, starting with epitaxial wafers, but with polished wafers set to follow. This puts the bargaining power firmly back into the hands of the wafer producers, who can rightly point out how hard done by they have been in the last four years," the research firm wrote. Nvidia's Xetra stock gained 1.38%.
A renewed rise in international semiconductor stock investment also benefited German semiconductor company Infineon Technologies (IFX.F), which added 3.70% at the end of the session and was the best performer on the DAX.