German shares close lower as subprime worries continue UPDATE

German shares close lower as subprime worries continue UPDATE

	Published : Thu, 26 Jul 2007 18:06 By : Agencies Print this Story

(updating with full report)

FRANKFURT (Thomson Financial) - German shares closed lower as Wall Street opened in negative territory and dealers pointed to continued worries about effects from the US subprime and real estate sectors as well as US economic data raising fears of interest rate increases.

The DAX closed 183.59 points or 2.39 pct lower at today's lowest level of 7,508.96, down from today's high of 7,731.17.

The MDAX was down 311.26 or 2.87 pct at 10,534.20 points, while the TecDAX

dropped 24.32 or 2.63 pct at 899.45 points.

DAX futures were down 202.50 points or 2.60 pct at 7,577.50, while bund futures gained 0.77 points or 0.69 pct to 112.92 points.

The euro was trading at 1.3725 usd, against 1.3720 usd in afternoon London trade.

Traders pointed to Europe-wide fears that the problems in the US real estate sector might spread to financial markets worldwide.

In addition, a local trader said recently released US economic data,

including declining weekly unemployment claims, was increasing fears of possible

interest rate increases in the US.

On the Frankfurt trading floor, Siemens was down 5.60 eur or 5.62 pct to 94.10, leading blue chips lower and extending yesterday's losses after the electronics giant announced the sale of its VDO autoparts unit to Continental for 11.4 bln eur.

Continental declined 3.70 eur or 3.41 pct to 104.80 as Fitch Ratings said it placed the company's long-term issuer default and senior unsecured ratings of 'BBB+' and short-term IDR of 'F2' on negative watch following its decision to buy VDO.

MAN was down 5.32 eur or 5.00 pct to 100.99 after peer Scania reported disappointing second-quarter figures today due mostly to higher costs.

Financial stocks were generally lower, with Postbank declining 2.80 eur or 4.67 pct to 57.20 and Commerzbank dropping 1.19 eur or 3.59 pct to 31.96.

At the other end, RWE added 0.07 eur or 0.09 pct to 78.40 as the sole large cap riser of the day.

Over on the MDAX, Wacker Chemie dropped 13.54 eur or 7.37 pct at 170.17, as

the index's worst performer.

Meanwhile, Vossloh rose 5.55 eur or 7.03 pct to 84.50 after releasing consensus-beating second-quarter figures and raising its earnings forecast for the current year.

TecDAX-listed Morphosys was 3.71 eur or 8.11 pct lower, while Kontron gained 0.50 eur or 3.23 pct to 15.99.

judith.csaba@thomson.com

jcs/slm/jcs/slm

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