German Equities Close Higher; US-Iran Tensions Flare
Germany's blue-chip DAX index was in the green on Tuesday, closing 0.12% higher, following US threats to block Iranian ports again and impose a 20% transit fee on vessels passing through the Strait of Hormuz."Whether this is actually being implemented cannot be definitively assessed as of this morning. We doubt, however, that the U.S. is militarily capable of securing the route in such a way that ship transit is possible without any danger. Instead, this seems to us to be more of a negotiating tactic intended to pressure Iran into making concessions during the negotiations," Metzler Capital Markets said.On the geoeconomic front, an ifo Institute study warned that the European Union faces the risk of failing to achieve its critical raw material independence targets amid a lack of concrete projects and inadequate geological data. To secure the resources needed for technologies required for segments like defense, renewables and semiconductor manufacturing, ifo researcher Isabella Gourevich urged the EU to move past declarations of intent and immediately fund partnerships and local mining projects, noting that developing untapped deposits could take up to 18 years.In local economic news, Germany's selling prices in wholesale trade were up 4.9% year over year in June, after a 5.9% increase in May. Monthly wholesale prices were 0.7% lower, compared with the consensus estimate of a 0.5% gain. Destatis mainly attributed the increase to the Middle East conflict, which drove prices of energy products and raw materials higher.On the corporate side, Deutsche Bank (DBK.F) partnered with the World Bank Group's Multilateral Investment Guarantee Agency on a 1 billion-euro platform to expand trade finance in emerging and frontier markets. As part of the deal, the agency will offer guarantees to the German lender against non-payment risks from eligible state-owned banks. Deutsche Bank gained 1.52% at closing.Meanwhile, Deutsche Bank Research trimmed the price target of Carl Zeiss Meditec's (AFX.F) hold-rated stock to 28 euros from 30 euros amid concerns that its fiscal 2026 guidance "looks like a stretch" ahead of the company's fiscal third-quarter results due on Aug. 6."On the earnings front, however, we expect a 7% year-over-year decline in adjusted EBITA, implying a margin of 9.8% (-110bps). This would bring our nine-month margin forecast to 7.5%, meaning a significant acceleration would be needed in the fourth quarter to reach the full-year guidance range of 8-10%. Achieving this appears to be a stretch, as it also relies on improving refractive laser procedure trends in China. Consequently, we would not be surprised if management points toward the low end of the guidance range with the results; our own forecast currently sits in the lower half of this range," the research firm said. The medical technology company ended the trading day 10.77% in the red.
