German blue chip stock market drops to five-month low | Business| Economy and finance news from a German perspective | DW | 04.06.2012
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German blue chip stock market drops to five-month low

Germany's stock market benchmark, the DAX, has continued its downward slide at the beginning of the new week. Early on Monday, it dropped below the support threshold of 6,000 points as trading remained volatile.

Germany's DAX index slid below the psychologically important mark of 6,000 points in early trading on Monday, continuing a downward ride from last week. The blue-chip index lost 1.51 percent within minutes after trading started, marking its lowest level since January 5, 2012.

"We will remain bearish for quite some time longer," Commerzbank strategist Petra Kerssenbrock told the Reuters news agency. "What we need for technical improvement is either a trading bottom pattern or a clear sell-off, but at the moment it's still wait-and-see."

Other European stock benchmarks did not do much better, either, as the new trading week unfolded. The Ibex-25 stock barometer in Spain also dropped below 6,000 points, reaching its lowest level since 2003.

France's Cac-40 lost 0.6 percent in early trading and the EuroStoxx dropped by 0.64 percent, with no trading activities in London because of a public holiday on Monday.

Trading jitters

Market uncertainties were gravely impacting stock values as fears remained that Spain might not be able to get on top of its full-fledged banking crisis on its own. It was feared that Spain might have to ask for European bailout action.

European markets still felt the aftershocks of disappointing US jobs market data released last Friday. Traders expected important signals for the markets later this week.

"Everybody is now waiting for what decisions the ECB will take on Wednesday and what US Federal Reserve Chairman Ben Bernanke will announce on Thursday," Francois Duhen of CM-CIC Securities said in an official release. "There are strong expectations that something will happen, otherwise the markets will go much further down."

hg/srs (AFP, dpa)