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World

Euro zone investor morale slumps to four-year low in December

BERLIN: Investor morale in the euro zone slumped to a four-year low in December as fears about trade conflicts, Italy's

Dec 10 2018

BERLIN: Investor morale in the euro zone slumped to a four-year low in December as fears about trade conflicts, Italy's budget row with the European Union and Brexit led to a collapse in sentiment, a survey showed on Monday.

Sentix research group said its investor sentiment index for the euro zone slid to -0.3 from 8.8 in November, the lowest level since December 2014, and the fourth consecutive monthly drop. The slide far exceeded analysts' expectations of a dip to 8.1.

A sub-index on current conditions fell to 20.0 from 29.3 in November. A sub-index on expectations fell to -18.8 from -9.8 the previous month.

"Looking at the international environment, there is practically no glimmer of hope," Sentix managing director Manfred Huebner said, adding that the situation revived memories of the time preceding the 2008 financial crisis.

"While the European Central Bank is preparing for the end of the billion-dollar government bond purchases, the economy is slimming down at a considerable pace, again challenging politicians and central banks," said Huebner.

"Whether trade disputes, the Italian crisis, unrest in France and Belgium or Brexit: it's coming from all corners at the moment," he added.

A separate index on investor morale in Germany fell in December to 7.2 from 15.6 in what Huebner described as a "breathtaking loss of momentum" caused partly by worries about possible US tariffs on cars and weak Chinese car sales.

Sentix surveyed 1,076 investors from Dec. 6 to 8.

Copyright Reuters, 2018