German market, business disappointed at election standoff

Germany's markets plummeted on Monday after no parties won a clear majority to form a new government in Sunday's general elections.

The benchmark DAX Index on Frankfurt stock market dropped 2.3 percent once, the biggest decline since April.

The index had crossed the mark of 5000 points when polls projected a government change before the voting two weeks ago. Energy utility companies are the biggest decliners Monday because they had expected the pro-business Angela Merkel's alliance to win.

E.ON, Europe's second-largest utility, declined 3.1 percent to 77.11 euros while RWE, Europe's third-largest utility, dropped 2.9 percent to 55.26 euros.

Meanwhile, the euro also hit its lowest level in a month, falling to 1.2132 US dollars before rising to 1.2137 in later trading in the day.

Business leaders expressed their disappointment on Sunday at the results of the general elections.

"From the point of view of industry and trade, we are bitterly disappointed," said Juergen Thumann, chief of the German industry confederation BDI.

Official results showed that no party or alliance won a clear majority in Sunday's elections. Both Chancellor Gerhard Schroeder and Merkel, candidate from the alliance of Christian Democratic Union (CDU) and Christian Social Union (CSU), claimed that they would set up a new government.

Analysts say a grand coalition between Schroeder's Social Democratic Party (SPD) and Merkel's CDU-CSU alliance is most likely.

"Germany is becoming more difficult to govern," Thumann said.

Hubertus Pellengahr, spokesman for German Retailer's Federation HDE, urged the parties to settle the dispute and set up a new government as soon as possible.

President Anton Boerner of German Wholesale and Foreign Trade Federation BGA said it was a pity that Germans had not chosen a clear direction.

Soon after the election results were announced by TV networks, both Schroeder and Merkel claimed victory in the elections.

The CDU/CSU won 35.2 percent and the SPD 34.3 percent of the votes, according to official results.

Source: Xinhua