12:04 PM EDT, 05/12/2026 (MT Newswires) -- German equities were downbeat on Tuesday, with the blue-chip DAX index ending the trading session 1.62% in the red, as the market assessed fresh inflation data and the economic sentiment survey from the eurozone's biggest economy against the tenuous Iran war ceasefire.

Final data from Destatis confirmed that the annual inflation rate in Germany climbed to 2.9% in April from 2.7% in March. The annual core inflation rate, which excludes food and energy prices, eased to 2.3% from 2.5%.

"Overall inflation increased for the second consecutive month as a result of another rise in energy prices that was due to the Iran war. Consumers are particularly feeling the persistent price pressure regarding motor fuels,"Federal Statistical Office President Ruth Brand said.

Meanwhile, the ZEW economic sentiment indicator for Germany rose to -10.2 points in May from April's -17.2 points, beating the consensus forecast of -19.2 points. However, the current situation index fell by 4.1 points to -77.8 points, against the expected -77.5 points. ZEW President Achim Wambach said there is "cautious hope"for a possible recovery in the latter half of 2026, contingent on a de-escalation in the Middle East and a positive impact from the government's economic stimulus efforts.

On the geopolitical front, US President Donald Trump described the ceasefire with Iran as "on life support"after rejecting Tehran's counteroffer. Against this backdrop, Danske Bank said Brent crude remained on an upward trajectory, trading at around $105 per barrel on Tuesday morning.

Amid a busy session for corporate earnings and trading updates, Bayer (BAYN.F) was the top blue-chip stock, gaining 3.67%, after reiterating its full-year 2026 currency-adjusted outlook following a strong first quarter, during which net income more than doubled to 2.76 billion euros from 1.30 billion euros a year earlier.

Meanwhile, Munich Re (MUV2.F) shed 6.09%, dropping to the bottom of the DAX index, as investors focused on the reinsurer's planned volume reductions during the April renewals amid softer pricing, overshadowing its solid first-quarter results.

"Munich Re is doubtless showing discipline on price to preserve margins and current returns are strong but consensus FY top-line expectations on first view look too high. Key questions are whether EUR64bn FY Reinsurance revenue target, unchanged today, is achievable vs EUR60bn Q1 run-rate, with consensus already below at EUR62.4bn, and the degree to which [property-casualty reinsurance and global specialty insurance] margins can be maintained into 2027 and beyond,"RBC Capital Markets wrote in a quick-take note.