German stocks experienced a dip on Wednesday, with the blue-chip DAX index falling by 1.13% at closing. This decline occurred despite new indicators of recovery within Germany's private sector and the wider eurozone. Data compiled by S&P Global revealed an uptick in business activity within Germany for October, yet it remained in contracting territory for the fourth consecutive month.
The headline HCOB Germany Composite PMI Output Index climbed to a three-month high of 48.6, up from 47.5 in the previous month. Additionally, the business activity index for the services sector soared to 51.6, reflecting an improvement from 50.6. In the broader eurozone context, business activity stagnated in October.
The HCOB Eurozone Composite PMI Output Index stood at 50 points, achieving a two-month high after recording a contraction of 49.6 last month. The services sector within the bloc also witnessed an increase, reaching a two-month high of 51.6 from 51.4. Hamburger Commercial Bank's Chief Economist, Cyrus de la Rubia, observed, "It is not clear if stagnation of the Eurozone economy will be prevented given the Composite PMI recorded 50.0 in October.
Our GDP nowcast for the fourth quarter, based on the PMIs and several other indicators, signals a slight contraction, although GDP growth is still possible if the manufacturing sector improves over the next two months, for which the October figures provide some, albeit very tentative, hope." Meanwhile, the United States elected Donald Trump as its next president, raising concerns about potential negative ramifications for Germany and the European Union, as highlighted by the ifo Institute.
Director Lisandra Flach stated, "Germany and the EU must now strengthen their position through measures of their own. These include deeper integration of the EU services market and credible retaliatory measures against the US. We must be prepared for the US to distance itself further from open, global cooperation." On a positive corporate note, Siemens Healthineers (SHL.F) stood out as the leading gainer among German blue-chip companies, surging 5.99% by closing time, following its report of year-on-year increases in attributable net income and revenue for its fiscal year 2024.
The medical technology firm anticipates continued revenue growth for fiscal year 2025..