Economic concerns and uncertainty about the interest rate course of the major central banks have sent investors on the German stock market fleeing.

The Dax lost 1.3 percent to 18,374 points on Tuesday, while the EuroStoxx50 was also down 0.9 percent. It is clearly too early to sound the all-clear for a correction after the recent record run, says Jürgen Molnar from the broker RoboMarkets. The market is waiting for the one impulse that could give it direction for the summer. The Dax last recorded an all-time high of 18,892.92 points in mid-May, after which the leading German index moved well away from the 19,000-point mark again.

Investors were particularly concerned about the price of oil, which fell to its lowest level since the beginning of February on Tuesday following recent disappointing US economic data. North Sea Brent and US WTI oil fell by around two percent at times to 76.80 and 72.54 dollars per barrel respectively. "Many energy-intensive companies will be pleased with this development," said Thomas Altmann, portfolio manager at asset manager QC Partners. "At the same time, however, a low oil price is always a warning signal." After all, lower demand for oil is an indication of weak economic activity. The energy stocks index fell by 2.7 percent.

US ECONOMIC DATA EAGERLY AWAITED

Investors are now hoping for further indications of the state of the US economy from the US industrial orders report, which is due this afternoon. This will also give investors another opportunity to adjust their expectations regarding the monetary policy of the major central banks, write analysts at LBBW in a commentary. Stock market players are hoping that the US Federal Reserve will perhaps bring about a turnaround in interest rates sooner than expected if the economic data disappoints in the near future. The Fed, which is trying to push up prices with high interest rates, is currently keeping the key monetary policy rate in the range of 5.25 percent to 5.50 percent. Experts currently expect the first interest rate cut in the fall at the earliest. At the European Central Bank (ECB), experts believe that the interest rate turnaround at Thursday's meeting is a foregone conclusion. The euro lost 0.3 percent to 1.0868 dollars in the run-up to the meeting. The dollar index was up slightly at 104.28 points.

DEUTSCHE TELEKOM SHARES UNDER PRESSURE

On the corporate side, Siemens Energy stood out among the losers. The shares of the energy technology group, which have more than doubled since the beginning of the year, fell by more than five percent in the DAX. Shares in Allianz also fell following a downgrade by Citigroup. The shares, which the analysts downgraded from "buy" to "neutral", lost 3.4 percent.

Shares in Deutsche Telekom also lost ground, falling by just under two percent. On Monday, the German state placed 110 million Deutsche Telekom shares with investors via the state bank KfW within a few hours, raising 2.43 billion euros. This reduced the state's stake in Deutsche Telekom from 30.0 percent to 27.8 percent. The German government intends to invest the proceeds in the restructuring of the railroads.

(Report by: Daniela Pegna, edited by Christian Götz. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)