German investor morale drops unexpectedly in February
By Sakari Suoninen and Eva Taylor
MANNHEIM, Germany (Reuters) - German analyst and investor sentiment fell in February due to concerns that the economic upturn in the United States could lose steam and worries about emerging market economies' prospects in the medium-term, a survey showed on Tuesday.
The Mannheim-based ZEW economic think tank's monthly poll of economic sentiment dropped to 55.7 from 61.7 in January, falling well short of the consensus forecast in a Reuters poll of analysts for it to hold steady. It was the lowest reading since November.
But ZEW President Clemens Fuest said the drop "must not be overstated" given that the majority of survey participants were still upbeat and economists also warned against reading too much into the index's drop.
"Although the ZEW index has a good track record of predicting economic turning points, the latest decline does not point to a change in direction of the economic trajectory yet," said Christian Schulz, senior economist at Berenberg Bank.
"The negative factors should remain temporary. The balanced retreat of optimism across regions shows that emerging market turbulences in January hurt optimism," he added.
Reasons for the decline included uncertainty caused by recent U.S. unemployment data and concern about the prospects for China, said ZEW. Another factor was a decision by Germany's Constitutional Court to refer the European Central Bank's bond-buying program to the European Court of Justice, it said.
Investors' assessment of current conditions was, however, a bright spot in the survey, with a separate gauge measuring this increasing to 50.0 points from 41.2 in January and beating the consensus forecast in a Reuters poll for a reading of 44.0.
Other recent sentiment indicators have painted a rosy picture of the German economy, with consumers feeling their most upbeat in more than six years and business morale rising. Continued...