Germany's Blue-chip DAX Index Retreats as ECB Holds Rates
German shares fell on Thursday, with the blue-chip DAX index closing 1.56% lower, as investors assessed the European Central Bank's latest monetary policy decision alongside fresh corporate earnings and trading updates.In a widely expected move, the ECB kept its deposit facility rate at 2.25%, while maintaining the interest rates on the main refinancing operations and marginal lending facility at 2.40% and 2.65%, respectively. The central bank's Governing Council reiterated its data-dependent approach to rate decisions, noting continued uncertainty amid ongoing global trade disputes and geopolitical tensions."Through the rearview mirror, this decision clearly makes sense. Headline inflation has actually come down, there are very few signs of knock-on effects from higher energy prices, and the eurozone economy has shown some resilience to the current oil price shock. It's only survey-based inflation expectations that have gone up and will be a concern for the ECB. Looking ahead, however, the decision of whether to keep interest rates unchanged is not so straightforward," ING said.In other economic news, the euro area's consumer confidence index stood at -15.9 points in July, up from the revised -17.6 points in June, according to the European Commission's flash data. Analysts expected -17 points for the month.On the geopolitical front, market sentiment continues to be weighed down by a 12th consecutive night of US strikes on Iran, with US President Donald Trump threatening to destroy Iranian power plants and bridges if ships in the Strait of Hormuz are targeted and Tehran vowing retaliation in return. Concurrently, Iranian-aligned Houthis claimed attacks on two Saudi oil tankers in the Red Sea, putting further strain on crude markets.On the corporate side, Daimler Truck (DTG.F) was the top performer, climbing 3.93%, after upgrading its full-year 2026 outlook, including lifting its industrial business revenue guidance to between 43 billion euros and 47 billion euros from the previous target of 42 billion euros to 46 billion euros."Daimler Truck has issued an ad hoc announcement, raising its full-year guidance due to lower tariff costs and a stronger US truck market. We note that strong Class 8 order figures in June had already indicated a robust second half, and we welcome the US approval of Daimler's content application. As Daimler assembles approximately 70% of its trucks for North America in Mexico, higher US content significantly reduces Section 232 import tariffs for the company. Consequently, any potential miss on Q2 results will likely be overlooked, as investors will focus on the upgraded guidance for the current year and beyond," Deutsche Bank Research said.Meanwhile, Fresenius (FRE.F) launched a new 200 million-euro venture fund called Fresenius Ventures to deploy capital over the next five years into healthcare innovation. The fund will focus on areas such as precision nutrition, microbiome research, new modalities, and digital care provision. The therapy-focused healthcare company declined 1.65% at the end of the trading day.
