DAX Turns Negative

The DAX 40 pared some initial gains to trade slightly below 25,000 on Friday, on track to halt six consecutive sessions of gains. Investor were cautious amid the postponement of US-Iran talks aimed at securing a lasting peace agreement in the Middle East. Overnight attacks in Lebanon between Israel and Hezbollah also weighed, prompting a fresh rise in oil prices. Volkswagen dropped more than 4% as it traded ex-dividend, weighing on the index. In contrast, defense stocks were in high demand due to the fragile US-Iran deal, led by Renk (2.4%) and Rheinmetall (1.6%). Automakers shares showed signs of recovery, with Mercedes-Benz Group and BMW rising more than 1%, on reports that the EU is preparing tariffs on Chinese plug-in hybrid vehicles.

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%).