On Friday, German equities faced further declines as investors digested the latest industrial order report from Europe's largest economy. The blue-chip DAX index ended the trading session down 1.75%, signaling ongoing challenges in the market. The decline was accentuated by alarming statistics indicating that Germany's new orders in manufacturing plummeted 7% month-over-month in January 2025.
This downturn followed a previously revised 5.9% growth in December 2024, showcasing a stark reversal in the manufacturing sector's performance. Destatis, the official statistical office, primarily attributes this disheartening figure to reduced new orders in the machinery and equipment manufacturing sectors, as well as in other transport equipment industries. HSBC provided insights into the current manufacturing landscape, remarking, "Despite some small improvements, manufacturing indicators are still downbeat: The HCOB manufacturing PMI sits well below the 50-pts threshold, with February's level at 46.5 pts marking the best performance in over two years.
The ifo manufacturing assessment is still at rock bottom, and the majority of companies expect things to worsen over the coming six months. This all suggests that, at least in the short term, manufacturing activity in Germany will remain subdued." Looking ahead to economic data releases, Germany is set to unveil its latest international trade figures on March 10.
Analysts predict that the country will experience a trade surplus of 21 billion euros. Additionally, the week will conclude with the final inflation report for February, where preliminary estimates indicate an annual inflation rate of 2.3%, unchanged from the previous month. On the corporate front, Bayer's stock ($BAYN) fell by 6.48%.
The German healthcare and agricultural conglomerate has announced its pursuit of shareholder authorization for a capital increase intended to secure necessary funds for future endeavors, including potential litigation settlements in the United States. The company clarified in its annual general meeting agenda published on its website, "The Authorized Capital 2025 shall only be used if it is absolutely necessary to do so in order to preserve the business interests of Bayer Aktiengesellschaft.
There are no specific plans at present to utilize Authorized Capital 2025.".