DAX Gains on Hopes for U.S.-Iran Diplomacy and Hormuz Reopening

The benchmark DAX index climbed 0.53%, adding 129.17 points to reach 24,573.50, driven by optimism surrounding diplomatic efforts in Pakistan. Reports indicate that Pakistan is facilitating the groundwork for a second round of talks between U.S. and Iranian officials in Islamabad. The potential for a fragile ceasefire and the subsequent reopening of the Strait of Hormuz—a critical global energy artery—has provided a tailwind for European equities. Sector gains were broad across the German index. Brenntag led the advance with a 2.2% increase, followed by RWE at 2% and Allianz at 1.85%. Other major components, including SAP, Siemens, Siemens Healthineers, Adidas, and Daimler Truck Holding, saw gains ranging between 1% and 1.3%. However, Beiersdorf tumbled 2.7% after reporting a decline in group sales across all regions for the first quarter of 2026. The equity rally stands in stark contrast to bleak economic data released by the Centre for European Economic Research (ZEW). The ZEW Economic Sentiment Index for Germany plummeted to -17.20 points in April, a significant drop from -0.50 in March. Similarly, the ZEW Current Conditions index deteriorated, falling to -73.70 points from -62.90 in the previous month. Market participants are currently weighing the immediate geopolitical upside of reduced energy supply risks against the deteriorating fundamental economic outlook for the German economy. While the diplomatic progress offers a short-term catalyst, the ZEW data suggests deep-seated concerns regarding the domestic economic trajectory.