FRANKFURT (dpa-AFX) – The US attack on Iran is expected to be a key driver for the already beleaguered stock markets in the coming week, at least initially. However, early indications from broker IG on Monday morning point to only minor losses.

US President Donald Trump announced late Saturday night (CEST) that the United States had completely destroyed Iran's "critical uranium enrichment facilities." Three sites were bombed, including the heavily fortified underground Fordo uranium enrichment plant.

However, Iran's IRNA news agency reported that only part of the area around the Fordo enrichment facility had been damaged. According to Iranian Foreign Minister Abbas Araghchi, Iran is still assessing the extent of the damage.

Investors have already digested a number of key monetary policy decisions. Now, the focus is shifting increasingly to the first corporate earnings reports of the recent business period, as well as the approaching deadline for US-European Union trade talks in July.

All of this, however, could be overshadowed if the conflict between the US and Iran escalates further. Christian Henke, an analyst at broker IG, warned as early as Friday that the United States could itself become the target of counterattacks in the event of a strike.

An Iranian blockade of the strategically vital Strait of Hormuz, crucial for global oil supplies, would drive oil prices and inflation higher—"which would likely weigh on stock markets." Experts, however, see this as the least likely response from Tehran, as it would also impact China's interests. Beijing, considered one of Iran's few close allies, sharply condemned the attack.

For the DAX, which has already fallen far from its record high, a closure of the strait could accelerate the current market correction, according to Henke. In early June, the German benchmark index reached its latest all-time high at 24,479 points. Since then, it has been mostly downhill. The 21-day moving average, important for the short-term trend, dropped several days ago. The index has only just managed to hold above the more significant 50-day moving average, thanks to recent stabilization.

Since the start of the year, however, the DAX has still outperformed other major European stock indices—not to mention US markets. Among the few indices that have risen even more than the DAX in the first half of the year are Hong Kong's Hang Seng and South Korea's Kospi.

When comparing international indices with German market barometers, it is important to note that the calculation of index levels in Germany includes dividends, which is unusual internationally. This makes the DAX's performance look somewhat better, but even without factoring in payouts, the overall picture does not change significantly.

Looking at the economic outlook, the new week will see the release of global purchasing managers' indices for the manufacturing and services sectors. For Germany, key data will include the Ifo Business Climate Index (Tuesday) and the GfK Consumer Confidence Index (Thursday). Among the numerous US data releases, consumer confidence (Tuesday), a new estimate of first-quarter GDP growth (Thursday), and the PCE price index, important for domestic monetary policy (Friday), will be of particular interest.

Internet investment group Prosus is set to publish its annual results on Monday and will hold a capital markets day on Wednesday. Additionally, pharmaceutical giant Roche will host a hematology investor event early in the week, which could also impact share prices of local sector companies.

On Tuesday, DIY retailer Hornbach, listed in Germany's small-cap SDax, will release its quarterly report. Auto supplier and tire manufacturer Continental will kick off a two-day capital markets event. Also spanning two days is the crucial NATO summit for the booming defense industry, taking place in The Hague, Netherlands.

On Wednesday, US semiconductor manufacturer Micron will report on its business performance. The following day will see updates from textile giant Hennes & Mauritz (H&M), and—late in the evening—from US sportswear giant and Adidas rival Nike.

--- By Gerold Lohle, dpa-AFX ---