The German index DAX 40 rose by 1.2% on Friday to 25,100 points, driven by SAP's results and a better-than-expected composite PMI for the eurozone. The Ibex 35 gained 0.9% in the session and 0.7% over the week.
The DAX 40 closed on Friday with a 1.2% increase, reaching 25,100 points after hitting one-month lows. The rebound, which surpassed the psychological barrier of 25,000 points, restored confidence in the German market after a week marked by tariff uncertainty.
Two factors drove the recovery: corporate earnings and a macroeconomic data point that exceeded expectations. SAP, the software giant, surged by 10% after reporting quarterly revenue that beat forecasts, supported by its cloud business and demand for its artificial intelligence platform. Atoss Software also gained nearly 10% thanks to its cloud-related figures.
On the negative side, Adidas fell by 1.5% and Volkswagen dropped by 2.4% after weaker results and a downgrade in revenue outlook. Nevertheless, the overall balance was clearly bullish.
The composite PMI for the eurozone returned to expansion territory in July, exceeding expectations and led by the German recovery. This data, combined with the decline in oil prices following news of possible peace talks between the United States and Iran mediated by Pakistan, calmed nerves and reignited buying.
The rebound of the DAX 40 is often a reliable thermometer for other European markets. The Ibex 35, which had come from an uneven week, finished Friday's session with an increase close to 0.9%, allowing it to close the week positively with a cumulative rise of 0.7%. More cyclical stocks, such as banks and industrials, took advantage of the improved sentiment to recover some of their losses.
The DAX's rebound was a welcome relief, but US tariffs remain a burden for German exporters.
The recovery of the German manufacturing PMI is particularly relevant for Spanish companies with exposure to the community market. Exports to Germany represent a significant percentage of the revenue of many listed companies on the Ibex, so a rebound in activity in the engine of Europe tends to anticipate better orders.
The note of caution came from US tariffs. The US administration maintains levies on imports from 60 trading partners, including the European Union, which continues to weigh on growth prospects. However, the market preferred to focus on the day's data.
The spike in oil prices seen earlier in the week deflated on Friday following a geopolitical news item with little clarity. The idea that Pakistan could mediate to reactivate talks between the United States and Iran might just be a rumor that does not materialize. Without a sustained drop in energy prices, underlying European inflation will remain sticky, limiting the ECB's room to cut rates aggressively.
Moreover, tariffs are not a minor risk. German companies, heavily reliant on foreign trade, are on the front line. The DAX 40 includes many exporting stocks that could see their margins eroded if the trade war escalates. Friday's rebound momentarily forgot that risk, but institutional investors are very aware of it.
In my view, Friday's movement is more of a technical adjustment and a covering of short positions than a fundamental change. As long as the tariff threat remains, rises will be sold. The Ibex 35, for its part, benefits from the correlation, but its bias remains exposed to the banking sector, which is very sensitive to rates and risk premium.
All in all, the session leaves a lesson: when European data improves, stock markets respond. And if the ECB manages to steer a rate cut without putting pressure on the euro, the DAX and the Ibex have room to grow. The next test will be the ECB meeting in September and the third-quarter earnings season.
Closing quote: The DAX 40 closed on Friday at 25,100 points, with a 1.2% increase in the session. The Ibex 35 ended the week with a cumulative rise close to 0.7%, boosted by the German rebound.
Technical key: The DAX 40 rebounded from the support zone of 24,800 points, a level that coincides with July's low. A breakout above 25,300 points would signal strength, while losing 24,500 would open the door to a deeper correction.
Macro note: The Spanish risk premium remained stable around 90 basis points, without reacting significantly to the PMI data. Investors expect the ECB to maintain an accommodative tone in September.
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