German DAX Gains Ground on Economic Data, Up 0.41% in Cautious Session

The German stock market advanced on expectations of moderately positive economic signals, with the benchmark DAX index climbing to new intraday highs. Following a sluggish opening that saw the index dip to 24,339.16, the DAX rallied to 24,616.94—a gain of 101.21 points or 0.41%—as investors positioned ahead of the European Central Bank’s upcoming monetary policy announcement. Market sentiment remained decidedly reserved, however, as geopolitical tensions continued to weigh on trader sentiment following Iran’s warning of potential escalation in response to U.S. military actions.

Economic Indicators Support Modest Market Recovery

German retail sales data offered a ray of optimism in an otherwise cautious trading environment. Official statistics from Destatis revealed that retail sales rebounded 0.1% on a monthly basis in December, erasing November’s 0.5% decline and matching economist forecasts. More impressively, annual retail sales growth accelerated to 1.5% year-over-year, up from November’s 1.3% expansion. These figures suggested underlying consumer resilience despite broader economic headwinds.

The euro area’s manufacturing sector showed signs of stabilization, with the S&P Global HCOB manufacturing Purchasing Managers’ Index rising to 49.5 in January from December’s nine-month trough of 48.8. Though the index remained below the 50.0 threshold—indicating continued contraction—the improvement marked a meaningful recovery from recent weakness. Germany’s manufacturing activity specifically continued its prolonged decline, having contracted for 43 consecutive months through January. Yet the final German factory PMI climbed to 49.1 in January, a three-month high, as production returned to growth after December’s brief pullback.

Market Bifurcation: Winners and Losers

Stock performance reflected the market’s selective optimism. Consumer and industrial stalwarts led gains, with Adidas soaring nearly 2.3% and insurance play Hannover Rueck climbing 2%. Telecom giant Deutsche Telekom and financial heavyweight Allianz advanced 1.85% and 1.7%, respectively. Fresenius, SAP, Munich RE, Gea Group, Henkel, and Commerzbank each added between 1.0% and 1.15%, while E.ON, Fresenius Medical Care, Heidelberg Materials, Beiersdorf, and Mercedes-Benz posted more modest gains.

Commodity and industrial exposure stocks faced persistent headwinds from weak energy and metals pricing. Rheinmetall, Brenntag, Infineon Technologies, and Siemens Energy each declined 1.0% to 1.7%, while Deutsche Bank, Bayer, and Volkswagen slipped marginally. Symrise drifted lower by 0.7%.

The mixed performance underscored investor caution ahead of central bank policy guidance, with DAX participants evidently cherry-picking exposure to defensive sectors while rotating away from economically sensitive names.