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DAX tanks amid global economic fears

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DAX tanks amid global economic fears
Photo: DPA
18:43 CEST+02:00
Germany's DAX stock index on Monday dropped to its lowest level in nearly a year on investors' fears about the downgrading of the US credit rating and the eurozone debt crisis.

The index of Germany's 30 leading blue-chip companies closed at 5,923.27 points, down more than 5 percent. The last time the DAX was that low was September 2010.

Monday's heavy losses at the Frankfurt Stock Exchange and other important European bourses came after US markets weakened in early trade. The broad sell-off started last week amid worries the world's leading industrial nations could be heading into another period of sustained economic crisis.

Across the Atlantic, financial market observers were closely watching Wall Street after rating agency Standard & Poor's cut the United States' credit rating from the top-notch AAA credit rating to AA+. The Dow Jones Industrials index was down 3 percent in morning trade.

Earlier on Monday, the markets seemed to be somewhat calmed, at least temporarily, by statements from the G-7 and G-20 groups of countries, which said they were prepared to ensure stability of the global financial system. They added that European countries were putting austerity measures in place in order to ensure sustainable budgets.

German Chancellor Angela Merkel and French President Nicholas Sarkozy also said on Sunday that they would do everything possible in order to ensure equilibrium and stability in Europe.

But that has not removed deep worry among investors that some European Union countries, such as Spain, Italy and Greece, continue to suffer dangerously high debt loads that drag down the entire eurozone.

The Local/DAPD/DPA/mdm

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