German investor confidence falls to 8-month low
Investor confidence in Germany, Europe’s largest economy, fell more than economists forecast to an eight-month low in August as equity markets tumbled.
By Agencies |
FRANKFURT: Investor confidence in Germany, Europe’s largest economy, fell more than economists forecast to an eight-month low in August as equity markets tumbled.
The ZEW Centre for European Economic Research in Mannheim on Tuesday said its index of investor and analyst expectations dropped to minus 6.9 from 10.4 in July.
That’s the lowest since December. Tuesday’s report adds to evidence that the US subprime crisis will dent confidence among executives and investors, hurting an economy already showing signs of slowing. That’s bolstering expectations the European Central Bank will refrain from raising its benchmark rate from a six-year high next month.
“Analysts are concerned about the medium-term impact of the current development on financial markets and expect growth to weaken in Germany,” said Stefan Bielmeier, an economist at Deutsche Bank. “It’s hard to fathom the extent and duration of the crisis. But if there is more negative news, sentiment will decline again.”
ZEW conducted its August survey between July 30 and August 20. The US Federal Reserve cut the rate at which it makes direct loans to banks on August 17 and stocks rebounded. About a third of the responses from the 291 participants came between August 17-20, ZEW spokesman Sandra Schmidt said. The euro dropped after the release, trading as low as $1.3457.
Credit-market turmoil worsened two weeks ago after some European banks acknowledged their vulnerability to rising defaults on American subprime mortgages, aimed at borrowers with a poor credit history. A gauge of investors’ assessment of the current economic situation dropped to 80.2 in August from 88.2 in the previous month, ZEW said.
The ZEW Centre for European Economic Research in Mannheim on Tuesday said its index of investor and analyst expectations dropped to minus 6.9 from 10.4 in July.
That’s the lowest since December. Tuesday’s report adds to evidence that the US subprime crisis will dent confidence among executives and investors, hurting an economy already showing signs of slowing. That’s bolstering expectations the European Central Bank will refrain from raising its benchmark rate from a six-year high next month.
“Analysts are concerned about the medium-term impact of the current development on financial markets and expect growth to weaken in Germany,” said Stefan Bielmeier, an economist at Deutsche Bank. “It’s hard to fathom the extent and duration of the crisis. But if there is more negative news, sentiment will decline again.”
ZEW conducted its August survey between July 30 and August 20. The US Federal Reserve cut the rate at which it makes direct loans to banks on August 17 and stocks rebounded. About a third of the responses from the 291 participants came between August 17-20, ZEW spokesman Sandra Schmidt said. The euro dropped after the release, trading as low as $1.3457.
Credit-market turmoil worsened two weeks ago after some European banks acknowledged their vulnerability to rising defaults on American subprime mortgages, aimed at borrowers with a poor credit history. A gauge of investors’ assessment of the current economic situation dropped to 80.2 in August from 88.2 in the previous month, ZEW said.
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