German equities declined at the end of the trading week, with the blue-chip DAX index losing 0.75% at Friday's close, as the latest euro area gross domestic product and employment data were released.
According to Eurostat's third estimate, the eurozone's GDP edged down 0.2% in the first quarter, revised downward from the second estimate's 0.1% uptick and following the prior three-month period's 0.2% rise. The contraction was primarily attributed to revised data showing a significant drop in Irish GDP. On a yearly basis, the eurozone registered 0.3% economic growth, below the second estimate of 0.8% and the previous quarter's 1.2%.
"Excluding the effect of Irish GDP, Eurozone growth remains remarkably steady at around 0.2% per quarter. But the Q1 reading was flattered by inventory frontloading ahead of impending supply disruption and higher prices. We think this effect will reverse in Q2," Oxford Economics said.
Meanwhile, final data from Eurostat showed that employment in the euro area inched up 0.1% in the first quarter, as expected, compared with the previous quarter's 0.2% increase. Annual employment grew 0.5%, matching preliminary projections and compared with the 0.7% gain in the previous three-month period.
On the corporate front, mwb Research noted that mounting pressures on pharmaceutical capital expenditure bolster its sell rating on Sartorius AG (SRT.F, SRT3.F).
"Recent reports that Eli Lilly may halve the second phase of its Alzey investment and Boehringer Ingelheim may cancel EUR 900m of German projects point to weakening investment visibility across Europe. Meanwhile, large pharma groups continue to commit capital to the US, driven by industrial policy, tariff exemptions and 'America First' supply-chain priorities. For Sartorius, a regional capex shift could pressure equipment-heavy LPS and parts of BPS. While recurring revenues (75% mwb est) should stabilize growth, they may not offset delayed investment cycles," mwb wrote. The German life science group was down 2.97% at closing.
In geopolitical news, Reuters reported that Iran doubled down on its support for Hezbollah while demanding that Israel retreat from southern Lebanon. Iran said it launched warning missiles and drones at US warships in the Gulf of Oman, accusing Washington of disrupting maritime traffic and detaining oil tankers.