DAX Brushes Off Eurozone Inflation as German Firms Worry About Global Competitiveness

Germany's DAX index remained relatively stable despite rising eurozone inflation and growing concerns among German companies about their competitiveness in the global market.

Eurostat confirmed that eurozone inflation edged up to 2.9% in July from 2.8%, while 'core' inflation, which excludes volatile food and energy prices, rose to 2.5% from 2.4%. However, these figures were in line with earlier estimates, so markets didn't react strongly.

A more significant signal came from the ifo Institute, a German economic research group, which reported that 25.4% of companies fear losing competitiveness outside the EU, and 17% say German industrial products are also losing ground inside Europe. The automotive sector was particularly affected, with 43% of car-related firms reporting a weaker position beyond the bloc.

The DAX index was driven by company-specific news, with Munich Re falling after agreeing to buy US cyber insurance startup At-Bay for an enterprise value of $575 million. Defense contractor Rheinmetall also slid after mwb Research argued that it will need 'significant' new orders to avoid a 2028 revenue gap, despite having an EUR 80.5 billion backlog and EUR 30.2 billion of fixed orders expected to convert into sales within about 2.5 years.