Frankfurt - German stocks eased Tuesday after the US Congress rejected Washington's bail-out plans.

The slide on the Frankfurt Stock Exchange was more moderate that in some other markets, with the bellwether DAX index falling 2 per cent from Monday's close before settling at 5761, down 0.8 per cent.

Bank stocks remained weak, a day after a German mortgage lender, Hypo Real Estate, won a financial lifeline from other banks and the German government.

It was the first German company to need help in the current crisis.

Market sources told Deutsche Presse-Agentur dpa that the key Hypo Real Estate investor, the JC Flowers group, would retain its 24.9-per-cent stake. JC Flowers paid 22.50 euros per share to buy in earlier this year.

Hypo Real Estate stock rallied slightly to 4.28 euros, an overnight gain of 0.8 per cent. (dpa)