German Stock Market Gains Ground On Encouraging Economic Data, DAX Climbs 0.41%

The German stock market opened on a positive note Monday, with the DAX index climbing to 24,616.94 points, up 101.21 points or 0.41% by late morning. This encouraging performance came despite early weakness and ongoing geopolitical tensions, as investors began to view recent economic indicators through a more optimistic lens. The mood remained somewhat guarded as market participants anticipated the European Central Bank’s monetary policy statement, yet the encouraging data flow provided some support to equity prices.

Encouraging Retail Sales Data Lifts Market Sentiment

Economic data released from Germany’s statistical office Destatis showed increasingly encouraging signs for consumer spending. Retail sales rose 0.1% on a monthly basis in December, reversing November’s 0.5% decline and matching analyst forecasts. On an annual basis, the picture became even more encouraging, with retail sales posting growth of 1.5% compared to November’s 1.3% increase. This acceleration in year-over-year growth provided the market with a positive signal about household consumption trends entering 2026.

Manufacturing Shows Encouraging Recovery Momentum

While manufacturing activity remained below the 50-point threshold indicating expansion, the encouraging trend line pointed toward stabilization. The euro area manufacturing Purchasing Managers’ Index rose to 49.5 in January from December’s nine-month low of 48.8, according to S&P Global’s survey results. Germany’s own factory PMI showed even more encouraging progress, reaching 49.1 in January—a three-month high—up from 47.0 in December as output returned to growth. Though the sector continued contracting for its 43rd consecutive month, the month-over-month improvement represented an encouraging development for market observers.

DAX Gainers Drive Positive Momentum

Individual stocks within the DAX index reflected the encouraging market sentiment with several notable gainers. Adidas led the pack with a nearly 2.3% advance, while Hannover Re climbed 2.0%. Deutsche Telekom and Allianz posted solid gains of 1.85% and 1.7%, respectively. Mid-cap gainers included Fresenius (up 1.4%), along with Gea Group, Munich Re, SAP, Henkel and Commerzbank, each gaining between 1.0% and 1.15%. E.ON, Fresenius Medical Care, Heidelberg Materials, Beiersdorf and Mercedes-Benz posted more modest advances.

On the downside, decliners included Rheinmetall, Brenntag, Infineon Technologies and Siemens Energy, which fell between 1.0% and 1.7%. Symrise edged down 0.7%, while Deutsche Bank, Bayer and Volkswagen declined marginally.

Cautious Optimism Tempered By Geopolitical Risks

Despite the encouraging economic backdrop, market participants remained watchful of geopolitical developments. Iran’s warnings of potential escalation in tensions continued to weigh on sentiment, while weakness in commodity-related stocks reflected softer metal and energy prices. These countervailing forces kept investors in a reserved mood despite the encouraging signals from retail and manufacturing data, suggesting that near-term market direction may depend heavily on the European Central Bank’s upcoming policy guidance.