Germany's market for technology shares and other supposedly high-growth stocks, the Neuer Markt, is to close after losing nearly all of its value over the past two years.

The demise of the Neuer Markt, often described as the European equivalent of the Nasdaq in the US, signals that investors' love affair with technology stocks is finally over.

The exchange enjoyed its heyday during the technology-led boom of the late 1990s, when German investors piled into Neuer Markt-listed firms.

But the combined market value of the 264 firms listed on the exchange has fallen by about 96% since early 2000, when the internet stock bubble began to deflate.

Those companies include MobilCom, the ailing mobile phone firm partly owned by France Telecom, and T-Online, Deutsche Telekom's internet arm.

Out of fashion

The market was also home to a series of fashionable media firms which promised to deliver above average returns for shareholders.

The closure of the Neuer Markt forms part of a wider plan to split German-listed stocks into an A-list of firms hoping to attract international investors, and a second tier of companies focused more on the domestic market.

The top tier of companies will be subject to stricter reporting requirements and transparency criteria.

Stock market indexes, including the blue-chip Dax and a new index for technology stocks, will be made up exclusively of A-list firms.

The rejig, which is due to take effect early next year, is partly aimed at restoring investor confidence in Neuer Markt listed firms.

"We want to organise our markets consistently in line with investors' needs," said Volker Potthoff, a Deutsche Boerse board member.

"To do this, we will safeguard maximum transparency with clear rules."

Germany's SMAX exchange for small company stocks is also due to close as part of the overhaul.