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Germany's DAX Index Retreats Amid Reignited US-Iran Conflict Fears

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German shares ended the trading week in the red, as the markets monitored geopolitical tensions in the Middle East and trade negotiations between the US and China.

At Friday's closing, the blue-chip DAX index lost 2.07%.

In a Thursday interview with Fox News, Trump said he is "not going to be ​much more patient" with Iran, urging the country to make a deal with Washington. Ongoing tensions in the Middle East and shipping disruptions in the Strait of Hormuz continued to support oil prices, adding to inflation and growth concerns. According to Deutsche Bank Research, Brent crude oil prices climbed another 1.21% overnight to $107.00 per barrel.

Rystad Energy also warned about tightening jet fuel supplies in Europe as the Strait of Hormuz remains closed.

"Europe is not facing a tight market. It is facing a structural supply hole," Susan Bell, Rystad Energy's senior vice president of commodities - oil said. "Record US Gulf Coast exports of 110,000 [barrels per day] into Europe and a handful of Dangote cargoes are welcome, but they cover less than half the deficit."

Back at home, the ifo Institute reported that business sentiment in Germany's residential construction sector deteriorated, as the industry navigates supply chain issues and rising capital costs fueled by geopolitical uncertainty. The business climate index plunged to -28.4 points in April 2026 from -19.3 points a month ago, marking its sharpest drop since April 2022.

On the corporate front, Renk Group (R3NK.F) was down 2.68%, as Berenberg adjusted its price target and forecasts for the military and civilian propulsion systems company to incorporate anticipated drops in German vehicle orders.

"RENK's medium-term outlook is underpinned by a EUR16.5bn order pipeline. Germany accounts for less than one-fifth of the total, on our estimates, offering an attractive level of diversification. We err on the side of caution and lower our German vehicle order intake assumptions, and this results in minor cuts to our EPS estimates," Berenberg wrote. "We lower our price target to EUR72 (from EUR76) to reflect our lower estimates and lower peer multiples."

Meanwhile, RWE (RWE.F) and Abu Dhabi Future Energy Co., d/b/a Masdar, secured approval from the UK Department for Energy Security and Net Zero to develop the Dogger Bank South West and Dogger Bank South East offshore wind farms off the northeast coast of England. The projects have a combined installed capacity of 3 gigawatts. The German energy group ended the session 2.30% lower.

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UK's FTSE 100 Slips into Red; Centrica Falls Amid British Gas Settlement Deal

British equities concluded the trading week in the red, with London's FTSE 100 down 1.72% on Friday's close, as investors assessed the latest corporate updates and the growing political uncertainty in the UK."Financial markets have responded to renewed UK political turmoil by ramping up bets on Bank of England tightening ... Almost three rate hikes are priced before year-end, almost identical to what's expected from the European Central Bank. We remain unconvinced. We're now forecasting one rate hike from the BoE in June, but only narrowly," ING said. "Though Prime Minister Keir Starmer is fighting on, investors are increasingly pricing a leadership contest that leaves Labour shifting left, loosening fiscal rules and increasing borrowing."In corporate news, Centrica's (CNA.L) British Gas subsidiary agreed to pay 20 million pounds sterling into a voluntary redress fund to settle a probe by the UK's Office of Gas and Electricity Markets, or Ofgem, into legacy prepayment meter practices. British Gas will also write off up to 70 million pounds in energy debt for customers in vulnerable situations as part of the settlement package. Centrica's shares lost 6.40% at closing."It is clear that British Gas fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM installed without consent, and it's right that they've taken action to put things right. Because of our action customers will receive a substantial package of redress, compensation and debt write off," Ofgem Chief Executive Officer Tim Jarvis said.Meanwhile, Hiscox (HSX.L) jumped 12.32% to become the blue-chip index's top performer amid chatter that its Canadian peer Intact Financial Corp. is looking at potentially acquiring the London-listed specialty insurer, according to Insurance Post.The UK economic calendar was empty for the day, but the week ahead will see a barrage of private sector and economy-related data, including the April inflation rate figures, along with the S&P Global UK Manufacturing PMI data for May.

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Asia Markets

European Stocks Tracking Lower in Friday Trading; Lack of US-China Trade Deal Hits Tech Shares

The European stock markets were tracking lower in Friday trading as investors parse the results - or lack thereof - of President Trump's summit with Chinese leader Xi Jinping.The Stoxx Europe was falling 1.56, Germany's DAX was dropping 2%, the FTSE 100 was down 1.9%, France's CAC was losing 1.6%, and the Swiss Market Index was heading marginally lower.Technology stocks, particularly within the semiconductor sector, were falling sharply after Trump left China without sealing a deal regarding tech imports and exports. Semiconductor companies STMicroelectronics and Infineon were falling 4.9% and 4.4% on the CAC and DAX respectively, while ASML and BE Semiconductor Industries were declining 4.7% and 3.7% respectively in Amsterdam.In corporate news, HSBC has yet to deploy the $4 billion it previously committed to its private credit strategy, with no current timeline for the planned investment, the Financial Times reported Friday, citing two sources familiar with the decision-making process.The London-listed lender announced plans last June to invest in its asset manager's private credit funds to expand in alternative lending, but the move has since been paused amid concerns over US private credit valuations and borrower risks, according to the report."We are committed to our asset management's offering in private credit funds," a HSBC spokesperson toldin an emailed statement.Shares of the British bank were down 2.5% in London.BP is contemplating selling certain natural gas assets in Egypt, Reuters reported Friday, citing sources familiar with the matter.The British oil and gas giant has yet to make a final decision regarding the move, according to the report.The company didn't immediately respond to' request for comment.Shares of BP were up 1.6% in London.Stellantis signed an agreement with Dongfeng Group to jointly manufacture Peugeot and Jeep vehicles in China, subject to customary conditions and approvals, the automaker said Friday.The joint venture will assemble two Peugeot new energy vehicles and two Jeep off-road models at a Wuhan plant starting in 2027, the company said.Shares of the automaker were falling 3.6% in Paris.Diageo will integrate its Africa and Europe operations into a single division amid an overhaul including major leadership changes, Bloomberg News reported Friday, citing an unnamed person familiar with the matter.Diageo did not immediately respond to' request for a comment.Shares of the alcoholic beverage company were up 2% in London.Endava said Friday it formed a strategic partnership with Tyl by NatWest to help modernize and expand the payments platform for Tyl customers.The company said the partnership would provide businesses with a more integrated payments experience by combining Endava's AI-based delivery tools and payments technology with Tyl's merchant services platform.Shares of the software firm were dropping more than 5% in Frankfurt.

Asia Markets

European Equities Traded in the US as American Depositary Receipts Down Sharply in Friday Trading

European equities traded in the US as American depositary receipts were sharply lower late Friday morning, falling 1.90% to 1,808.55 on the S&P Europe Select ADR Index, which is down 1.6% for the week so far.From continental Europe, the gainers were led by software firm SAP (SAP) and biopharmaceutical company Cellectis (CLLS), which were up 2.2% and 2.1% respectively. They were followed by internet advertising firm Criteo (CRTO) and accommodations booking site trivago (TRVG), which increased 1.6% and 1% respectively.The decliners from continental Europe were led by semiconductor company Sequans Communications (SQNS) and telecommunications company Nokia (NOK), which fell 5.2% and 4.7% respectively. They were followed by 3D printer company Materialise (MTLS) and pharmaceutical company Novo Nordisk (NVO), which lost 2.6% and 2.1% respectively.The gainers from the UK were led by biopharmaceutical company NuCana (NCNA) and software firm Endava (DAVA), which advanced 12.1% and 3.9% respectively. They were followed by biotech firm Trinity Biotech (TRIB) and oil and gas company BP (BP), which rose 3.4% and 1% respectively.The decliners from the UK and Ireland were led by pharmaceutical company Silence Therapeutics (SLN) and utilities company National Grid (NGG), which dropped 8.8% and 7.9% respectively. They were followed by mining company BHP Group (BHP) and biopharmaceutical company Biodexa Pharmaceuticals (BDRX), which were down 5.1% and 2.7% respectively.

$BDRX$BHP$BP$CLLS$CRTO$DAVA$MTLS$NCNA$NGG$NOK$NVO$SAP$SLN$SQNS$TRIB$TRVG