FRANKFURT (dpa-AFX) - As cautious as the forecasts for the past week were, no one expected a slump like the one at the beginning of the week. Even though Germany's leading index, the Dax, ultimately escaped with a black eye, the situation remains tense.

This is all the more true as little has changed in terms of the risks. Although the highly valued US technology stocks have lost ground, it remains questionable whether this marks the end of their correction. Concerns about the economy are also far from over. This is particularly true for the USA. Expectations of a cycle of interest rate cuts have increased. However, it is uncertain whether this will be enough to turn the markets around quickly. "Interest rate cuts due to economic concerns are not well received on the stock market, unlike interest rate cuts following a successful fight against inflation," according to an assessment by asset manager HRK Lunis.

The calm that had recently returned to the German stock market could therefore prove to be deceptive. Portfolio manager Jens Herdack from Weberbank expects fluctuations to continue. This is all the more true as August marks the beginning of a traditionally weak stock market phase. Added to this are the special features of the vacation season. The experts at HRK Lunis point to "holiday-related sparse trading floors". This could quickly increase selling pressure, as "automated sell orders from computer-controlled strategies are given particular weight".

With the reporting season coming to an end, the focus is on the upcoming economic data. "Investors will be looking at US economic data such as the Empire State Index, the Philadelphia Fed Index and initial jobless claims for any signs of recession," say the economists at Landesbank Hessen-Thüringen (Helaba).

They are also interested in inflation. Inflation is still above the US Federal Reserve's target of two percent, which limits the scope for interest rate cuts. The publication of producer and consumer prices for July on Tuesday and Wednesday respectively is therefore likely to attract increased attention.

Relief from domestic figures is not to be expected. The ZEW index for August on Tuesday is likely to merely confirm the subdued impression of other data. "Now that the Sentix index has fallen noticeably, this leading indicator is also likely to fall again," forecast Helaba's economists. "The German economy is currently unlikely to do more than bottom out in the second half of the year."

The political tensions in the Middle East are also continuing to weigh on the markets. Although things have remained calm over the past week, there are still concerns about retaliatory strikes against Israel following the killing of two leading figures from Hamas and the Lebanese Hezbollah militia.

In addition to these negative factors, there are also positives. Despite being more than 1,000 points off its high for the year to date, the DAX is not in such bad shape. "The stabilization tendencies of the last few days have not been deceptive," said technical analyst Jorg Scherer from HSBC Bank. As long as the Dax remains above the 200-day moving average, currently at 17,467 points, the situation remains constructive.

According to Scherer, above this key level, the low from mid-June at 17,951 points together with the area between 17,918 and 18,070 points will form the next recovery target.

This means that fears of a massive slump on the stock markets do not appear to be justified. "An even greater crash or even a crash would simply not be possible without an accompanying crisis," said technical analyst Marcel Mussler. "So we are still only talking about a third-quarter correction."/mf/la/he

--- By Michael Fuchs, dpa-AFX ---