German economic sentiment slumped to a seven-month low in June, a sign that the economic upswing in Europe’s largest economy is losing momentum.
The ZEW think tank said Tuesday its indicator of economic expectations dropped for the third straight month to 31.5 in June, from 41.9 in May. That was the lowest level since November 2014, when the indicator stood at 11.5, MarketWatch reported.
The outcome was worse than expected. Economists polled by The Wall Street Journal had forecast a decline to 37.0.
ZEW president Clemens Fuest said “uncertainty over Greece’s future and the restraint dynamic of the global economy” are dampening economic sentiment.
The 229 analysts and institutional investors participating in the ZEW survey were also less content with Germany’s current situation. The corresponding indicator fell to 62.9 in June from 65.7 in May.
In another sign of increased uncertainty, Germany’s DAX 30 shares index has fallen about 12% since its April peak. At 0905 GMT it traded at 10,860, compared with 12,391 on April 10.
For May 2015, the trend reversal in the ZEW Indicator of economic sentiment for the Eurozone also made investors in European equity wary of their holdings.
The Europe-tracking SPDR EURO STOXX 50 ETF was down 1.08%, while the Vanguard FTSE Europe ETF declined 1.03%. European companies’ ADRs (American depository receipts) also lost on Friday. STMicroelectronics was down 0.85%, Alcatel-Lucent was down 1.54%, Novo Nordisk dipped 0.16%, and SAP shed 1.44%. AstraZeneca and ABB were also down by about 0.59% and 1.14%, respectively.
