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Germany's DAX Index Gains as Eurozone Inflation Slows

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German shares ended the session in the green on Wednesday, with the blue-chip DAX index rising 0.18%, after the release of key economic data, including the eurozone's latest inflation print and manufacturing PMI survey results.

Flash data from Eurostat showed that annual inflation in the euro area was 2.8% in June, against May's 3.2% and the market forecast of 3%. Meanwhile, the core rate, which excludes energy, food, alcohol and tobacco, stood at 2.4%, down from the previous 2.6% and the expected 2.5%.

"The drop in June was in part related to oil price declines, which are starting to translate into lower prices at the pump... Then again, the question is whether current favourable oil price levels can persist. As the Dutch and Germans found out at the World Cup, temporary excitement can quickly turn to misery if the underlying fundamentals remain shaky. But even at somewhat higher prices, it seems that worst-case scenarios have become less likely," ING wrote.

Back home, S&P Global reported that the final headline German Manufacturing PMI ticked up to 50.3 in June from 50.1 a month ago, above the flash estimate of 50 and near the 50-point no-change mark. The sector remained in expansion territory as a small, renewed increase in new orders lifted output amid the first signs of easing cost headwinds.

On the geopolitical front, US President Donald Trump said discussions with Iran in Qatar had been constructive and would continue. The talks have raised expectations for further diplomatic progress towards a lasting ceasefire.

In corporate news, Rheinmetall (RHM.F) was the DAX index's top stock, climbing 6.07%, as the German arms maker finalized its purchase of a 51% majority interest in Croatia-based Dok-Ing from founder and previous sole owner Vjekoslav Majetić, who will retain a 49% share. The acquisition of the company, which will be renamed Rheinmetall Unmanned Vehicles, expands Rheinmetall's portfolio to include unmanned vehicles.

Meanwhile, Deutsche Bank Research upgraded Nordex Group's (NDX1.F) price target to 61 euros from 59 euros and reiterated its buy rating ahead of the German wind turbine manufacturer's second-quarter earnings report on July 29.

"We expect a 5% beat on the Q2 Project order intake, a +2% beat on Q2 group revenues and a +5% beat on adj EBITDA vs consensus. Positives in the quarter include the 1st sizable set of US orders in a while and good weather and supply chain-positive for installations and margins," Deutsche Bank wrote. Nordex gained 0.78% at closing.

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Dow Jones^EEM^EXI^FAS^FAZ^GLD^IBB^IGM^IGV^IPK^IVV^IWMNasdaq Composite^IYE^IYH^IYJ^IYK^IYW^PMR^QQQ^RTH^SOXXS&P 500^SPY^UNG^USO^VDC^VHT^VIS^XLE^XLF^XLI^XLK^XLP^XLV^XRT^XSD$BETH$BITO$EETH