Germany Takes a Hit With Iran War. These Stocks Might Still Be Bargains.

Germany’s economy and equity market have taken a hit from the Iran war, with the DAX (Germany 40) falling about 5% since the U.S.-Israel strikes on Feb. 28. Berlin cut 2026 growth forecasts to roughly 0.5% and the Ifo business-climate gauge slid to pandemic-era lows, weighing on sentiment and the chancellor’s popularity. Investors and strategists see pockets of opportunity: software giant SAP and defense contractor Rheinmetall are each off about 30% this year, and some managers are adding defense and infrastructure names (including SPIE and Kongsberg-related exposure). The conflict has also shifted ECB rate expectations higher (two–three hikes from a 2% benchmark), which could help bank margins; Deutsche Bank shares are down about 20% this year. Overall, the piece frames a defensive, risk-off move for German equities but highlights selectively attractive, oversold stocks for long-term investors.