German DAX Slips 0.8% on Tech Rout and Middle East Escalation

German equities declined Friday as escalating geopolitical tensions in the Middle East and a broad technology sell-off weighed on investor sentiment.

Oil prices surged after Iran launched strikes across the Gulf region in response to recent U.S. military action targeting Iranian positions, a confrontation centered on control of the Strait of Hormuz. Brent crude futures climbed nearly 2% to $85.88 a barrel before paring gains slightly to $85.70.

The benchmark DAX index fell 203.10 points, or 0.81%, to 24,663.36 in late morning trading.

Infineon Technologies led the decliners, plummeting 5.5%. Hochtief and Siemens dropped 3.7% and 3.3%, respectively, while Siemens Energy shed 2.9% and Deutsche Bank slipped 2.6%.

Daimler Truck Holding, Continental, MTU Aero Engines, Brenntag, Scout24, Merck, Commerzbank, Symrise, Adidas, and Bayer all lost between 1% and 2%. Heidelberg Materials, Volkswagen, and Deutsche Bank posted moderate losses.

Conversely, Deutsche Telekom rose 2.3%, Rheinmetall advanced 2.1%, and E.ON gained 1.5%. Munich RE, Qiagen, BMW, Hannover RE, and SAP added 0.5% to 1%.

On the economic front, Eurostat confirmed that eurozone inflation cooled to a three-month low of 2.8% in June, down from 3.2% in May, matching the preliminary estimate released on July 1. Core inflation, excluding energy, food, alcohol, and tobacco, eased to 2.4% from 2.6%, also in line with forecasts. On a monthly basis, the harmonized index of consumer prices dipped 0.1%.

Separately, the European Central Bank reported the euro area current account surplus widened to €25 billion in May from €17 billion in April. A year earlier, the surplus stood at €26 billion. Over the twelve months to May, the surplus totaled €272 billion, or 1.7% of GDP, down from €318 billion, or 2.0%, a year prior.

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