DAX Index Subdued as German Inflation Cools

12:01 PM EST, 01/06/2026 (MT Newswires) -- Local equities were little changed on Tuesday, after the release of Germany's latest inflation figures and private sector data. Amid a busy day for economic updates, the blue-chip DAX index closed the session 0.09% in the green. Preliminary data from Destatis showed German annual inflation eased to 1.8% in December 2025 from the previous 2.3%, against the market forecast of 2%. The core inflation rate, which excludes food and energy prices, stood at 2.4%, against the 2.7% in November 2025. "Looking ahead, German headline inflation looks set to drop further over the coming months and will remain below the 2% mark, before re-accelerating again later this year," ING said. "All in all, German inflation should basically fluctuate around 2% throughout 2026; initially slightly below that level and later somewhat above. This is good news for the European Central Bank and the German government as it removes one concern from an otherwise long list of economic challenges." Meanwhile, final business survey data confirmed that Germany's private sector continued to expand, albeit at a slower pace, at the end of 2025. According to S&P Global and Hamburg Commercial Bank, the final HCOB Germany composite PMI output index fell to a four-month low of 51.3 in December 2025 from 52.4 a month ago, below the initial reading of 51.5. For the service sector, the final PMI came in at a three-month low of 52.7, against the previous 53.1 and the flash estimate of 52.6. "Business activity in the private service sector grew for the fourth month in a row. Although the pace of expansion has slowed slightly, it can still be described as relatively robust. In this environment, companies also found themselves compelled to hire more staff than the month before, after having even reduced employment at times in 2025. The moderate growth in new business suggests that the start to the new year could be satisfactory," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said. In corporate news, adidas (ADS.F) was the index's biggest loser, shedding 3.83%, following a "double-downgrade" from BofA Global Research amid expectations of slower growth. The German sportswear maker was downgraded to underperform from buy, while its price objective was slashed to 160 euros from 213 euros. "The brand remains in an upcycle but the stock faces three hurdles: short term (slower 4Q [organic sales growth] with no/low [operating expenses] leverage), medium term (likely FY26 high single digit organic sales guidance vs the double-digit trend initially planned, [signaling] the soft landing of the brand's upcycle) and longer term (risk to the double-digit EBIT margin...)," the research firm wrote in a 2026 outlook for the European sporting goods sector.