German Stocks Drop Amid Growing Concern on Syria Conflict
German stocks declined, with the benchmark DAX Index falling to its lowest level in six weeks, amid growing concern that the U.S. will take military action against Syria for using chemical weapons.
Volkswagen AG (VOW) lost 1.7 percent as a gauge of carmakers was among the worst performers on the Stoxx Europe 600 Index. Salzgitter AG (SZG), Germany’s second-biggest steelmaker, lost 1.6 percent after confirmation that it will be removed from the Stoxx 600.
The DAX slipped 0.5 percent to 8,202.08 at 9:33 a.m. in Frankfurt. The gauge has still rallied 6.7 percent from its low on June 24 as the European Central Bank said that interest rates will remain low for an extended period. The broader HDAX Index also fell 0.6 percent today.
“The poison gas in Syria, the potential intervention of U.S. soldiers and a further escalation in this powder-keg remain the key triggers also on the trading floor,” Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt, wrote in an e-mail. “Markets are alienated by the insecurity and the unknown indirect consequences in a region, which is affected by a lot of disturbances.”
The U.S., France and Britain are moving closer to retaliatory military action against Syria, laying out the justification, putting forces into place and rounding up allies in the region.
Any armed response would be focused on Syria’s weapons capabilities and wouldn’t be aimed at deposing President Bashar al-Assad, U.S. and U.K. officials said. U.K. Prime Minister David Cameron said in London that while no decision has been made on a course of action, it would be legal and proportionate.
In the U.S., a report at 10 a.m. New York time may show that pending sales of previously owned homes were little changed last month after declining 0.4 percent in June, according to the median forecast of 37 economists in a Bloomberg News survey.
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