Berlin (dpa) – German investors have laid aside concerns about any economic fallout from the Paris terrorist attacks with a key indicator released on Tuesday rising for the first time in seven months in November.
The Mannheim-based ZEW institute said that its closely watched investor confidence indicator, which measures the mood among analysts and institutional investors, jumped to a more-than-forecast 10.4 points this month from a reading of 1.9 in October.
“The outlook for the German economy is brightening towards the end of the year,” said ZEW chief Clements Fuest. “Economic pessimism appears not to have increased after the terror attacks in Paris.”
Economists surveyed by dpa-AFX had forecast a rise in the indicator this month to 6 points.
“The currently high level of consumption in Germany, the recent decline in the external value of the euro, and the ongoing recovery in the United States are likely to bolster the robust development of
the German economy,” said Fuest.
The release of the report triggered a jump in German shares with the Frankfurt Stock Market’s main DAX index rising 2 per cent 10,932 points in morning trading.
Based on a survey of 225 analysts in Europe’s biggest economy, the ZEW indicator helps to set the stage for the release later this month of other leading economic sentiment surveys, including this month’s Germany’s business confidence index.
“The hope for new European Central Bank action in December and consequently a weaker euro have clearly improved investors’ optimism,” said ING Bank chief economist Carsten Brzeski.
ECB chief Mario Draghi has already signalled that the bank is considering boosting or extending its bond-buying programme aimed at firing up the eurozone economy and heading off the threat of deflation.
The prospects of the ECB launching new monetary stimulus at its December meeting has helped to renew pressure on the euro, which slipped gain by 0.1 per cent to 1.0607 dollars in European trading on Tuesday. A weaker currency helps to boost Germany’s export-oriented economy.
Worryingly, however, the ZEW indicator’s component gauging current economic conditions dropped to 54.4 points in November from 55.2 points in October.