(fxcue news) - German stocks are down sharply on Tuesday with investors reacting to the first round of voting in the nation's Parliament Election. The failure of Conservative leader Friedrich Merz to secure the required parliamentary majority to become chancellor has dealt a big blow to his coalition with center-left Social Democrats. Investors are also focusing on corporate earnings updates, and looking ahead to the Federal Reserve's monetary policy announcement due on Wednesday. The benchmark DAX, which tumbled to 22,857.38 earlier in the session, was down 344.83 points or 1.48% at 22,990.59 a little while ago. German automotive parts maker Continental AG shares are down 0.6%. The company reported a net income of 68 million euros in its first quarter, compared to a loss of 53 million euros a year ago. Earnings per share were 0.34 euro, compared to loss of 0.27 euro last year. Covestro reported that its first quarter net loss was 160 million euros compared to a loss of 35 million euros, last year. Loss per share was 0.85 euros compared to a loss of 0.19 euros. The stock is trading flat. HUGO BOSS reported an 8% drop in net income at 35 million euros in the first-quarter, compared to a year ago. Earnings per share was 0.51 euros compared to 0.55 euros. The stock is up more than 4.5%. MTU Aero Engines is declining more than 4%. BASF, Porsche, Rheinmetall, Infineon Technologies, Daimler Truck Holding, Deutsche Bank and Siemens are down 3 to 3.5%. Siemens, Heidelberg Materials, Siemens Energy, SAP, Commerzbank, Zalando, Bayer, Volkswagen, Adidas, Mercedes-Benz and BMW are also notably lower. Fresenius Medical Care is rising 3.6% on strong results. On the economic front, the HCOB Germany Composite PMI was revised higher to 50.1 in April 2025 from a preliminary of 49.7, and compared to 51.3 in March. The services sector slipped into contraction with the PMI falling to 49 in April from a reading of 50.9 9 in March. Meanwhile, manufacturing activity remained depressed with the manufacturing PMI coming in at 48.4 in April, compared to 48.3 in March.