Stagnation in the U.S. budget talks leads German stocks to a decline

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Source: Dukascopy Bank SA
© scanpix/reuters
The German shares erased their earlier gains after the Chairman of Federal Reserve said the approved plan to purchase $45 billion a month Treasury securities will not resolve the "fiscal cliff ", as no progress has been made in reaching the U.S. budget deal.

The German DAX index lost 0.27%, or 20.25 points, to 7,594.26 by 15:25 GMT. The index has surged 27% from its lowest level in June when the ECB decided on the unlimited bond-buying program and Fed launched the QE3. All but two sectors in the index eased down. Utilities and financials posted the biggest losses by declining 1.45% and 0.77%, subsequently. The nation's largest utility company RWE dropped 1.8% to 31.30 euros as Morgan Stanley downgraded its stock rating from overweight to equal weight. Meanwhile, only Consumer services and Technology gained by adding 0.62% and 0.19%. Lufthansa was the top-performing company as it announced its plans on expanding product portfolio by introducing premium economy. Alongside to that, Volkswagen and Infineon Technologies inched 0.85% and 0.61% higher.

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