German Stocks Tumble On Middle East War Concerns, Weak Data; DAX Down 1.3%

The German market is down sharply on Monday amid an escalation in the Middle East conflict, and data showing an unexpected drop in German industrial production in the month of January. A sharp drop in factory orders, and fears of inflation due to higher oil prices weigh as well on sentiment.

Tensions in the Gulf escalated following reports of explosions at Al Udeid Air Base, the largest United States military installation in the Middle East.

Bahrain’s state oil company has declared force majeure on its shipments after Iranian strikes in the region set the largest oil facility on fire.

The benchmark DAX fell to an 11-month low 22,918.19 before recovering some ground. Still, at 23,245.15, the index was down as much as 302.32 points or 1.28% a little while ago.

Among the benchmark’s components, only Hannover Rueck and Munich RE (both up just marginally), are in positive territory at present.

Continental is down 5.5%. Siemens Energy, Infineon Technologies and Siemens are down 4.7%, 4.4% and 4.1%, respectively.

MTU Aero Engines, Vonovia, Daimler Truck Holding, Commerzbank, Heidelberg Materials, Brenntag, Deutsche Bank, Adidas, E.ON, BASF, Merck and Qiagen are down 2%-4%.

Volkswagen, BMW, Deutsche Post, Bayer, Fresenius, Zalando, Porsche Automobil Holding, Fresenius, Henkel, Allianz and Mercedes-Benz are also notably lower.

Data from Destatis showed industrial production in Germany fell 0.5% in January, following a 1% decrease in December. Output was expected to climb 1%.

At the same time, factory orders plunged 11.1% in January, reversing last month’s 6.4% growth. Economists had forecast a moderate decline of 4.2%.

Excluding energy and construction, industrial production fell 2.5% in January compared to December.

Year-on-year, industrial production was down 1.2% following a 0.4% rise in December. At the same time, annual growth in orders eased to 3.7% from 11.7%.