German investor confidence fell sharply in February as weeks of global financial market turmoil fuelled worries about the world economic outlook.
The Mannheim-based Center for European Economic Research said its closely watched indicator measuring the mood among institutional investors and financial analysts in Germany dropped for the second consecutive month in February to one point, well down from 10.2 points in January, dpa reported.
However, analysts surveyed by dpa-AFX had forecast a steeper decline in the indicator this month, predicting it would slump to zero. The ZEW index now stands at its lowest level since October 2014.
Based on a survey of 214 investors, the ZEW indicator seeks to project economic sentiments six months down the track.
“The looming slowdown of the world economy and the uncertain consequences of the falling oil price put a strain on the ZEW,” said Sascha Steffen, who heads the institute’s international financial management research department.
“In view of these developments, the concern over an increased credit default risk has already caused stock and bond prices for many banks in Europe, Japan and the US to slump,” said Steffen.
Those responding to the ZEW’s February survey were also downbeat about the current state of the German economy.
The ZEW index measuring investors’ assessment of current economic conditions dropped from 59.7 in January to 52.3 points this month.
