Frankfurt, Tuesday - Germany's 30-share DAX index dropped more than 3%, driven down through key support levels as investors took fright at the sell-off on Wall Street. The blue-chip index ended the session down 80.74 points, or 3.17%, at 2469.79, its lowest close since early May. September DTB DAX futures were down 55 points at 2489 points.
Dealers said that while the fall was dramatic, they did not expect any further major losses this week. ``This was an orderly retreat,'' said Josh Waiblinger of BHF Bank in Frankfurt. ``The sell orders have been fairly cautious and we had expected a correction.''
The market narrowed its losses slightly in post-bourse electronic trade as Wall Street remained mostly steady after soft US prices data. Comments from the Bundesbank indicating it did not plan to raise rates soon also supported the market. The IBIS DAX index which measures electronic trade ended at 2475.98 points.
``Support is likely to hold initially at either 2450 or 2480 and we will probably see a small counter-reaction to the old support around 2520. But then the next move is down,'' Schreiweis said.
Analysts generally set the DAX's downside limit at 2400 points, but some saw the index making even more dramatic losses.
Crucially, the DAX broke below 2520 points in today's trade, a move which propelled it down below its 2500-point level for the first time in two months.
``Two major supports (2550 and 2520) are gone now,'' said technical analyst Giro Olbertz of Vereins und West Bank in Hamburg.
Chemical firms Bayer and BASF were among the heaviest traded shares, and dropped DM2.50 to DM41 and DM2.82 to DM50.45 respectively.
Computer software maker SAP suffered the biggest percentage decline, with its preference shares ending down more than 7% at DM202. Electronics and engineering giant Siemens AG fell DM1.70 to DM78.75.
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