German equities experienced a sharp decline on Friday due to concerns arising from a looming U.S. government shutdown and President-elect Donald Trump's warnings about imposing potential tariffs on the European Union. Trump suggested such measures could be a consequence if the EU fails to curb its expanding trade deficit with the United States, particularly by enhancing its oil and gas transactions with the American economy.
In other economic developments, data released by Destatis today indicated an unexpected halt in the declining trend of German producer prices for November. The producer prices witnessed a 0.1 percent increase year-on-year during November, overturning the 1.1 percent drop observed in the previous month. This outcome defied economist predictions, who anticipated a further dip of 0.3 percent. Notably, this marked the first price increase since June 2023, when there was a 1.2 percent rise.
The DAX index, Germany's market benchmark, shed 230 points, translating to a 1.2 percent decline, and settled at 19,740 following a 1.4 percent drop in the previous trading session. In the banking sector, Commerzbank and Deutsche Bank saw their shares fall by 1.4 percent and 2.3 percent, respectively. The automotive sector also faced losses, with BMW, Mercedes-Benz, and Volkswagen each declining by approximately 1 percent. Moreover, Delivery Hero SE, an online food delivery service, saw its stock decrease by about 1 percent after announcing the appointment of Marie-Anne Popp as its Chief Financial Officer, effective January 2025.
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