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DAX tumbles on Lufthansa news

Lufthansa has been off by 14% for most of the day, weighing the German equity index down. 

A flag waves outside the German stock exchange in Frankfurt
Source: Bloomberg

Having celebrated closing above the 10,000 level the Germany 30 has given this back up in very swift order. Rather than general market fears or specific economic data dragging the index down, it has been the bad figures and awful outlook that Deutsche Lufthansa has posted that has seen the index drop by 0.8% today.

Bad news for the airline sector has not been hard to find around Europe today as the FTSE’s move lower has also been dominated by drops in AIG and easyJet.

Over the last few weeks equity markets have begun to look increasingly overbought, and the succession of highs that indices like the S&P 500 have had were pointing to a correction. As Chris Beauchamp has pointed out, the 200-hour moving average comes in at 9942 and if this gives way then a retest of the much lower 9772 level is likely.

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