LONDON Jan 16 European shares were dragged
lower by a slide in Germany's blue-chip DAX index on
Tuesday, after several large futures trades pushed it down
through technical support, led by the country's top bank.
The large orders appeared to start the selloff that then
snowballed, triggering further selling in the futures market as
the index passed through 7,700 points, several traders said.
A stronger than expected ZEW index of investor sentiment had
helped it trim losses by 1022 GMT, however, when the DAX traded
down 0.5 percent at 7,707.55 points and the FTSEurofirst 300
index of leading European shares was down 0.2 percent
at 1,163.98 points.
"With the stress about peripheral Europe easing, it's not a
surprise to see big asset allocation trading programmes
switching out of the DAX, and the money should flow into markets
seen as riskier," a senior Paris-based trader said.
The reason for the trades was not immediately clear,
although Deutsche Bank, down 1.8 percent and taking
most points off the index, was the worst hit stock, and traders
cited several potential triggers. Commerzbank also
Some pointed to a report in German daily Boersen-Zeitung
which said German regulator BaFin had ordered large banks to
simulate a breakup, while others cited vague talk that Deutsche
Bank would issue a profit warning.
BaFIN was not immediately available for comment and Deutsche
Bank declined to comment when contacted by Reuters.