German equities closed downbeat on Monday, with the blue-chip DAX index 0.56% in the red, as the manufacturing downturn continued in Germany and the wider eurozone despite slight signs of recovery. Results of the latest S&P Global-compiled HCOB PMI survey showed that Germany's manufacturing remained in contraction in October, with the final headline HCOB Germany Manufacturing PMI at 43.
The latest reading marks a three-month high for the index, compared with 40.6 in September and the flash estimate of 42.6. "The monetary policy environment could be a small ray of hope for the manufacturing industry. The ECB cut interest rates again in October and is planning a further reduction in December.
The Fed opted for a reduction of 50 basis points in September. HCOB Economics expects one further interest rate cut in the eurozone and two in the US in 2024. These measures could ease financing pressure and support demand in the export-oriented German industrial sector," commented Hamburg Commercial Bank Junior Economist Jonas Feldhusen. "However, as long as structural problems persist in Germany, the outlook remains bleak.
This is because companies continue to contend with the lack of certainty for investment, high energy costs as well as strong competition and weak demand from China," Feldhusen added. In the wider eurozone, the manufacturing slump also eased in October, with the HCOB Eurozone Manufacturing PMI hitting a five-month high of 46, compared with 45 in the month before.
The preliminary reading was 45.9. On the corporate front, Siemens is collaborating with Abu Dhabi-based information technology and services company Etimad's Emirates Smart Solutions subsidiary for the upgrade of the Esna Barrage and Lock in the Egyptian city of Luxor. Under the deal, the German technology group will supply, install and operate a supervisory control and data acquisition system to control the movement of the barrage's gates.
At closing, Siemens lost 0.12%..