Germany's DAX Index Bleeds as ZEW Indicator, PMI Data Take Spotlight

11:56 AM EST, 12/16/2025 (MT Newswires) -- The German blue-chip DAX index closed 0.63% lower on Tuesday after the latest release of economic sentiment and private sector activity survey data. The ZEW economic sentiment index for Germany came in at 45.8 points in December, surpassing the previous 38.5 points and the expected 38.4 points. On the other hand, the current conditions indicator fell to -81 points from -78.7 points, lower than the market forecast of -80 points. "Expectations have become more positive. After three years of economic stagnation, chances for a recovery of the economy are good and this is reflected in the sentiment. The expansive fiscal policy will provide new momentum to the German economy. However, the recovery remains fragile. Measures for dealing with persistent trade conflicts, geopolitical tensions and the absence of investments are likely to figure on the reform agenda for 2026 as well," ZEW President Achim Wambach said. For the eurozone, the index also rose to 33.7 points from 25 points in November, compared with the market forecast of 26.3 points. Meanwhile, the current situation indicator is down 1.2 points to -28.5 points. Meanwhile, preliminary data showed that Germany's private sector activity growth decelerated for a second consecutive month in December, as new order intake stagnated amid a "sluggish" underlying demand environment. According to S&P Global and Hamburg Commercial Bank, the flash HCOB Germany composite PMI output index fell to a four-month low of 51.5 in December from the previous and expected 52.4. For the service sector, the PMI came in at a three-month low of 52.6, compared with 53.1 in November and the market forecast of 53. On the manufacturing front, the PMI dropped to a 10-month low of 47.7, against the prior reading of 48.2 and market forecast of 48.6. In corporate news, defense giant Rheinmetall (RHM.F) was the index's worst performer of the DAX, losing 4.54%, after US officials on Monday offered Ukraine NATO-style security guarantees as part of the proposed peace agreement with Russia. US President Donald Trump said a resolution is "closer" than before. Deutsche Bank Research restarted its coverage of RWE (RWE.F) at buy with a price target of 50 euros, ahead of critical investment decision updates. The German utility company was 0.25% in the green at the end of the trading day. "RWE has had a good 2025, with a strong fundamental story of multiple global investment opportunities across technologies. A strong Q4 share price performance was enhanced with the first major [data center-related] deal in the sector, with more in the works. Clarity on key investment areas of AR7 (UK offshore wind) and the German new build gas generation should come within 2 months...With a strategy update on capital allocation on 12th March, we think RWE has further to go," the research firm said.