German investor confidence leaps on reopening hopes

BERLIN: German investor sentiment jumped in January amid growing confidence Europe's top economy will bounce back from the brutal blow of the coronavirus pandemic, data showed Tuesday.

The ZEW institute's monthly barometer measuring economic expectations in Europe's largest economy rose 9.4 points to a new reading of 71.2 points in January.

It was the highest score since September, before the second wave of the pandemic hit.

The financial market experts polled "are optimistic about the future" and "confident that the German economy will be back on the growth track within the next six months", ZEW president Achim Wambach said in a statement.

In December, Germany tightened restrictions to curb the spread of the virus, closing most shops after a previous shutdown closed restaurants, bars, gyms and cultural activities.

Last week Chancellor Angela Merkel and state leaders extended the measures until March 7 but raised the prospect of a gradual reopening if new infection numbers continue to fall and highly contagious variants can be kept at bay.

Contrary to during the first wave of the pandemic last spring, Germany's current partial lockdown allows for factories and manufacturing businesses to remain open.

A German vaccine drive that got off to a sluggish start is also gathering pace, with 3.3 percent of the population having received the first jab.

ZEW's figure, based on a survey of 198 financial market experts, came in well above analysts' expectations of 60 points, according to a poll by FactSet.

Alongside growing investor confidence, ZEW's assessment of the current economic situation in Germany slipped marginally, falling 0.8 points to minus 67.2 points -- still deep in negative territory.

Robert Leonhardt of DB Bank said the survey pointed to a sunnier outlook for late 2021.

"Financial market participants think the restrictions will be lifted from the spring," he said. "They don't believe in a third wave."