Germany's DAX index has witnessed relatively limited losses on Tuesday following a crash in global stock prices which first began on Wall Street.

The Frankfurt-based blue-chip index was down 1.83 percent at 12,455.33 points around noon local time (CET). Higher losses of up to 3.6 percent when the exchange opened in the morning were hereby quickly reversed, dispelling fears that panic on U.S. financial markets would spread to the Eurozone's largest economy.

"Investors are staying calm", Daniel Saurenz of Feingold Research, commented with view to the dramatic flight from equities that had occurred on Wall Street a day earlier.

Nevertheless, Chancellor Angela Merkel (CDU) warned in response to the recent Wall Street crash that Germans were "living in uncertain times" as she entered a final round of "grand coalition" negotiations. Merkel argued that the news from global stock exchanges further underscored the need to quickly form a stable new government that was capable of ensuring its citizens' security and prosperity.

Dirk Gojny, analyst at Essen National Bank, expressed the view on the newspaper "Handelsblatt" that the recent losses in Germany and beyond mainly reflected higher than expected profit taking by investors after years of a low interest rate-fueled international equities boom.

"People have become used to low levels of volatility", Gojny said.

Thu Lan Nguyen, analyst at Commerzbank, attributed the bearish stock movements to growing fears that U.S. interest rates could rise faster again than anticipated. Such a move by the Federal Reserve would make bonds more attractive relative to equities.

Tuesday's biggest loser on the DAX so far is the reinsurance company Munich Re (minus 5.5 percent) whose earnings have suffered from a series of natural catastrophes in 2017.

As held true in other markets where trading began earlier than the U.S., German investors are keeping a wary eye on the re-opening of stock market activity in New York later Tuesday to see whether the equities rout continues for a second day.