Stock market in Germany bounces back after a dismal week's performance
German Stock Market Rebounds: Banks, Defense, and Airlines in Demand
The German stock market kicked off the new week on a positive note, with the DAX index rising by 1.12% on August 7, 2025. This upturn was reflected in the demand for European banks, defense giants, and airlines, according to a report by dpa-afx Frankfurt.
The MDax, a German mid-cap stock index, gained around 1% on Monday, mirroring the overall market sentiment. The Dax, another significant German stock market index, rose 1.4% to 23,743 points. Notable gains were seen in the shares of Deutsche Bank, which rose by 3.1%, and Commerzbank, which climbed 4.3%.
In the defense sector, Radar specialist Hensoldt's shares rose by 2%, while tank manufacturer Rheinmetall's shares increased by 3% due to their strong order books. The surge in these defense stocks can be attributed to analyst Chloe Lemarie of Jefferies, who sees opportunities for investors in the defense sector after the recent sell-off.
The demand for airlines also increased, with Lufthansa's shares rising by 1% after analyst Andrew Lobbenberg upgraded them from "Underweight" to "Equal Weight". British bank Barclays' more optimistic assessment boosted airline stocks, with Lufthansa, Air France-KLM, and IAG all experiencing gains.
However, it's important to note that the stock market gains on Monday were made despite ongoing concerns about Trump's trade policies and the economic outlook. The concerns about Trump's trade policies, economic outlook, and corporate earnings took a backseat on Monday, perhaps due to global and regional economic data showing some acceleration in service sector activity. This helped offset manufacturing slowdowns, thereby sustaining market growth and sector preferences especially in finance and industrials with good growth momentum.
Despite the positive day, Capital market strategist Jürgen Molnar of RoboMarkets warned against complacency, suggesting the overall trend for the Dax is likely to remain downward, despite recent gains. Heidelberg Druckmaschinen's shares jumped more than 7% due to their entry into the military business through a strategic partnership last week, but the long-term outlook for the company remains uncertain.
In summary, the demand for European banks, defense, and airlines on the German stock market as per the dpa-afx Frankfurt report corresponds to a day of broad market gains and sector-specific investor interest amid improving economic conditions and sectoral rebounds. However, investors are advised to exercise caution and consider the long-term outlook before making investment decisions.
Investors demonstrated interest in the finance sector, particularly European banks, as evidenced by the rise in Deutsche Bank's shares by 3.1% and Commerzbank's shares by 4.3%. Additionally, the stock-market growth was bolstered by investing in airlines, such as Lufthansa, whose shares increased by 1% after analyst upgrades.
