German Blue-Chips Hold Ground as Earnings and Geopolitics Clash

DAX index stable at 24,000 points as Aixtron's 20% surge on raised guidance offsets geopolitical fears and auto sector weakness. Broader German mid-caps outperform.

Germany's benchmark DAX index is clinging to the 24,000-point level, caught between a flurry of corporate news and persistent geopolitical anxiety. The index closed Wednesday at 24,067 points, a marginal gain of 0.09%, after having reclaimed the 24,000 mark a day earlier with a 1.3% advance. This superficial stability masks a market pulled in opposing directions by individual stock fireworks and broader macro fears.

The standout performer of the week was equipment maker Aixtron, which ignited with a spectacular 20.4% surge. The MDax member shocked the market by significantly raising its full-year guidance, now targeting revenue between 530 and 590 million euros—an increase of roughly 40 million euros from its previous outlook. The company also lifted its expected Ebit margin to a range of 17 to 20%, citing unexpectedly strong demand in optoelectronics. This single stock provided the loudest bang in an otherwise hesitant market.

Support within the DAX itself came from software giant SAP, whose gain of 2.62% was crucial in keeping the index in positive territory on Wednesday. Deutsche Börse also contributed to the upside. On the flip side, automaker Mercedes-Benz weighed heavily, shedding almost 2% amid sector skepticism and dividend cuts. The Deutsche Telekom was another notable drag, pressured by analyst warnings of an intensifying price war in the crucial US mobile market, where its T-Mobile US unit now contributes over 60% of group revenue.

Beyond the blue-chips, the broader German market showed more vigor. The MDAX and TecDAX indices posted stronger gains of 1.15% and 1.46% respectively, highlighting a dynamic shift towards smaller caps. Another positive impulse came from automotive supplier Schaeffler, whose shares jumped 6.6% on Wednesday morning, breaching the 8-euro mark for the first time since early March. Analysts at Jefferies noted the company's indicated first-quarter profitability was significantly ahead of expectations.

Geopolitical tensions emanating from the Middle East acted as a powerful counterweight, capping broader enthusiasm. Brief relief sparked by diplomatic hints was quickly neutralized by fresh threats, keeping investors on edge. This uncertainty is reflected in the real economy, where a recent Ifo Institute survey found 78.6% of German companies describe their business development as hardly predictable—the highest reading since February 2024. The nervous sentiment pushed the yield on the ten-year German government bond to 3.04%.

The technical picture offers little clarity. The DAX currently trades just above its 50-day moving average of around 23,993 points and marginally below its 200-day line. With a Relative Strength Index (RSI) near 48, the index is neither in overbought nor oversold territory, seemingly waiting for a decisive catalyst. Market participants now look to upcoming US-Iran talks and a wave of corporate earnings for direction. Key reports from ASML, Commerzbank, Porsche, and ING are imminent, with Deutsche Telekom’s figures due on May 13.

The European Central Bank's subdued growth forecast of just 0.9% for 2026, paired with 2.6% inflation, adds to the cautious macro backdrop. For the DAX to decisively break higher, analysts suggest a sustained move above 24,500 points is needed to fully neutralize the downward pressure of recent weeks. Whether corporate fundamentals can finally overpower the geopolitical headwinds will be tested in the sessions ahead.