March 9, 2015 / 9:39 AM / 2 years ago

Euro zone sentiment hits seven-and-a-half-year high in March

A picture illustration taken with the multiple exposure function of the camera shows a one Euro coin and a map of Europe, January 9, 2013.Kai Pfaffenbach

BERLIN (Reuters) - Sentiment in the euro zone surged to its highest level in 7-1/2 years in March as investors heartened by the European Central Bank's bond-buying program brushed off concerns about the economic turmoil in Greece.

Sentix research group's index tracking morale among investors and analysts in the euro zone climbed to 18.6, its highest level since August 2007, from 12.4 the previous month.

That was far higher than the Reuters consensus forecast for a reading of 15.0 and beat even the highest estimate for 17.5.

"The euro zone economy is showing definite signs of life," said Manfed Huebner, managing director at Sentix, adding that low oil prices and the weak euro were helping euro zone countries to get back on their feet.

The ECB is due to start purchasing bonds on Monday in a bid to hoist euro zone inflation from below zero back toward its goal of just under 2 percent, and to boost economies in the 19-country bloc.

"Yields, which fell significantly in the run-up to this, are having just as positive an impact on the economy as very abundant liquidity for banks and the real economy," Huebner said.

Investors were more optimistic about the future than at any time since February 2006 and they were the most upbeat about the current situation since May 2014.

An index tracking Germany hit an all-time high as investors' perception of the current situation and their expectations improved. Sentix attributed this to the ECB's attempt to boost the weak euro zone economy and a weak euro, which should make German exports more competitive.

The survey of 1,025 investors was conducted between March 5 and March 7.

Reporting by Michelle Martin; Editing by Stephen Brown

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