German investor sentiment rises
INVESTOR confidence in Germany rebounded slightly in August, as the shock over Britain's vote to leave the European Union began to wear off, a leading survey showed.
The investor confidence index calculated by the ZEW economic institute gained 7.3 points to stand in positive territory at 0.5 points in August, recovering from a massive 26-point slump in July that had brought the index to minus 6.8 points.
The index shows a “recovery somewhat from the Brexit shock”, said the institute's president Achim Wambach.
“As before, political risks within and outside of the European Union are weighing on an optimistic economic outlook for Germany. In addition, there are further uncertainties with regards to the ability of the EU banking sector to withstand shocks,” he added in a statement.
Britain sent financial markets plunging over its referendum on June 23 in which 52 percent of the population voted to leave the EU.
In a sign that investor fears are easing, the ZEW's sub-index measuring financial market players’ view of the eurozone economy showed a sharp improvement, jumping 19.3 points to 4.6 points.
Their assessment of Germany’s current economic situation was likewise more positive, rising by 7.8 points to 57.6 points. But analysts struck a note of caution.
Capital Economics analyst Jennifer McKeown pointed out that August’s recovery has not reversed the sharp fall in July. The key index fell below her expectation of a rise to 5 points. –