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German Shares Rally; Mercedes-Benz Climbs Post-H1 Results

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German equities rallied on Tuesday, with the blue-chip DAX index closing 0.52% higher, partly driven by Mercedes-Benz Group (MBG.F) after reporting its first-half earnings.

RBC Capital Markets viewed the German luxury vehicle manufacturer's second-quarter results positively, noting that its adjusted EBIT of 2.30 billion euros and revenue of 32.06 billion euros surpassed consensus forecasts of 1.65 billion euros and 31.90 billion euros, respectively.

"Mercedes posted a strong Q2 beat vs consensus, highlighted by Car margins coming in at 4%, above the 3.5% consensus level. While mgmt did temper its '26 Revenue/volume guide for the full year, consensus was already below the prior guide... Importantly, Mercedes monetized EUR400M of its 35% Daimler Truck [DTG.F] stake (its stake would imply ~(Euro)12.5B), representing ~3% of MBG's interest. On the positive side, this does indicate that the company is serious about asset monetization, but it likely will be done over a long period of time considering the relatively small disposition size done in Q2," RBC wrote. Mercedes-Benz Group was up 2.88%, while Daimler Truck increased 3.75% at the end of the trading day.

Outside the DAX index, photovoltaic projects developer Helios Solar (HE8.F) made its debut on the Frankfurt Stock Exchange's General Standard segment, opening at 4.15 euros per share.

In geopolitical news, Gulf nations are reportedly supporting a proposal from Oman that will allow Iran to collect voluntary passage fees in the Strait of Hormuz to help restore disrupted oil trade, a source told Reuters. The report comes as US President Donald Trump noted "good talks" were underway, while threatening renewed strikes unless negotiations produced results.

"And while Iran's Foreign Ministry suggested that no formal negotiations were taking place with the US, we saw continued reporting of talks between Iran and Oman on re-opening the Strait of Hormuz," Deutsche Bank Research said. "There was also some more concerning news, not least with Houthi attacks on Saudi oil facilities over the weekend. But overall, the focus on talks sent front-month Brent crude -8.70% lower, while 6-month Brent futures were down -3.29% to $79.67 [per barrel]."

Back home, the ifo Institute reported that German export expectations marginally improved in July, even as the industry still struggles with building momentum. The ifo export expectations ticked up to -3.3 points from June's -3.6 points, with increases projected in foreign sales across the electrical equipment, beverage, mechanical engineering, and food manufacturers.

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Asia Markets

Update: US Equity Indexes Mixed as Tech Heads Lower, Crude Oil Sinks on Pause in Iran Strikes

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