DAX Drifts Lower As Middle East Tensions Hurt Sentiment

(RTTNews) - German stocks fell on Tuesday as oil prices rose amid fresh strikes by the U.S. military against Iranian targets. Fears of possible interest rate hikes by the European Central Bank next month hurt as well.

The U.S. conducted 'self-defense strikes' on Iranian missile launch sites and boats near the Strait of Hormuz, clouding the outlook for an interim deal between Washington and Tehran.

Meanwhile, Israeli military has begun a wave of strikes against Hezbollah in the Bekaa Vally in the east of Lebanon and other parts of the country following an announcement by Prime Minister Benjamin Netanyahu that his country will intensify its attacks on Hezbollah.

Defense forces across the Gulf are on high alert as Iran pressed ahead with waves of missile and drone attacks on the UAE, Kuwait and Bahrain.

The ECB should raise interest rates in June even if there's a quick resolution to the Middle East conflict, ECB Executive Board member Isabel Schnabel said today.

"Even if the war ended today, a lot of damage has already been done to energy infrastructure and global supply chains," she said in an interview published on the ECB's website.

Germany's benchmark DAX, which fell to 25,174.75 earlier, was down 139.93 points or 0.55% at 25,254.00 nearly half an hour past noon.

Scout24 and MTU Aero Engines dropped 2.5% and 2.3%, respectively. Merck drifted down 1.7%.

Bayer, Infineon Technologies, Siemens Energy, Siemens Healthineers, Siemens, Adidas and SAP lost 1%-1.5%.

Symrise, Fresenius, Daimler Truck Holding, Hannover Rueck, Deutsche Post,

E.ON and Zalando climbed 1% and 0.85%, respectively. Porsche Automobil Holding, BMW and Volkswagen edged up marginally.