-- German shares lost on Monday after returning from the Labor Day holiday, with investors assessing the latest business survey data on local factory activity against escalating tensions in the Middle East and fresh tariff threats from the US.
At close, the blue-chip DAX index was down 1.24%.
According to S&P Global, the final Germany manufacturing PMI slipped to 51.4 in April from the 46-month high of 52.2 in the previous month, above the flash estimate of 51.2. The sector's expansion slowed as new orders and production growth were offset by "darkening" business outlook amid the ongoing Middle East conflict.
"Reflecting growing concerns about both demand and supply-side conditions, businesses expecting activity to fall in the coming year now outweigh those anticipating a rise. There are worries that surging inflation pressures and the associated squeeze on purchasing power will stifle demand, with factory gate price inflation jumping sharply to its highest in over three years in April. At the same time, with supply delays already at a level not seen since mid-2022, there is a risk that production could be scaled back regardless of the demand situation," S&P Global Market Intelligence economics associate director Phil Smith said.
Speaking of the Middle East conflict, Iran's navy claimed to have turned back a US warship at the Strait of Hormuz after allegedly striking it with two missiles while sailing near the port of Jask. Reuters, citing state media, reported that Tehran warned foreign navies of a "decisive response" if they enter the strait. The report comes as US President Donald Trump said Sunday that Washington plans to assist neutral commercial vessels stranded in the waterway.
On the tariff front, Trump announced on May 1, 2026, that he would increase levies on European Union-made vehicles to 25% from 15% starting this week, asserting that the bloc failed to comply with the July 2025 trade framework. The US President told reporters the move is intended to force European brands to onshore production more quickly.
Against this backdrop, German automotive companies Mercedes-Benz Group (MBG.F), BMW (BMW.F), Volkswagen (VOW.F) and Porsche Automobil Holding SE (PAH3.F) lost 3.35%, 2.44%, 2.22% and 0.94%, respectively, on Xetra.
Meanwhile, Siemens Energy (ENR.F) fell 2.09%, as the Austrian Federal Ministry of Economy, Energy and Tourism announced that the German energy technology company plans to invest 155 million euros in two projects in the country, including an initiative involving transformer production and the development of a new service plant.