DAX Poised to Book Weekly Gain

The DAX 40 rose about 0.5% to around 25,145 on Friday, its highest level in over two weeks, and was on track to post a 2.1% weekly gain. The index was supported by a recovery in automotive stocks, with Mercedes Benz-Group and BMW adding 2% each, as well as gains in defense giant Rheinmetall (2%) and Infineon (1.6%). Volkswagen slumped 3.6%,however, as it traded ex-dividend for the first time. Meanwhile, investors kept a close eye on geopolitical developments. Overnight attacks in Lebanon between Israel and Hezbollah raised doubts on a recent US-Iran agreement to end the Middle East conflict, while nuclear talks scheduled in Switzerland were abruptly cancelled. After the close, the construction company Hochtief will be added to the DAX, replacing Volkswagen subsidiary Porsche SE, which will be moved to the MDAX.

The DAX Index is picking up 120 points or 0.48 percent on Friday. Gains are led by Infineon (2.67%), Rheinmetall (2.64%) and Mercedes-Benz AG (1.27%). Biggest losers are Volkswagen (-4.26%), Adidas (-1.39%) and Zalando (-0.82%).

The DAX closed about 0.4% up at 25,027 on Thursday, the highest since early June and extending gains for the sixth successive session. Optimism surrounding the US-Iran agreement outweighed hawkish signals from new Fed Chair Kevin Warsh. The US formally signed an interim agreement with Iran that paves the way for an end to the Middle East conflict and the reopening of key energy export routes. Oil prices pulled back, reflecting easing inflation concerns. Tech companies, industrials and travel stocks were the top performers. Infineon Technologies led gains among equities, surging 6.4%. Siemens Energy advanced 4.5% following reports that the company is considering divesting its multi-billion-euro compressor and steam turbine business. Airline Lufthansa also performed well, adding 3.2%. On the flip side, automakers and software companies faced strong pressure.