Bloomberg News

European Investor Confidence Drops on Debt Crisis, Weaker Growth

October 10, 2011

Oct. 10 (Bloomberg) -- European investor confidence fell to the lowest in more than two years in October on concern that the region’s debt crisis and weaker growth in emerging markets will hurt economic expansion.

An index measuring sentiment in the 17-nation euro region declined to minus 18.5 from minus 15.4 in September, the Limburg, Germany-based Sentix research institute said in an e- mailed statement today. That’s the lowest since July 2009. A gauge of current business conditions plunged to minus 5.75 from minus 3.25, while an indicator of expectations dropped to minus 30.5 from minus 26.75.

The Stoxx Europe 600 Index has dropped 11 percent since Aug. 1 after Europe’s debt crisis spilled into Italy and Spain, forcing the European Central Bank to start purchasing the countries’ bonds. Euro-area growth almost stalled in the second quarter after France’s recovery ground to a halt and Germany’s expansion slowed more than expected.

“Above all, the unresolved sovereign-debt crisis in Europe is worrying investors,” Sentix said. “There are also signals of weaker growth in other regions of the world.”

Investor confidence in Asia, excluding Japan, plunged to 9.2 in October from 13.7. Sentiment in eastern Europe and Latin America also declined, today’s report showed.

Sentix said 925 investors participated in its monthly survey, which was conducted Oct. 6-8. The results are never revised.

--Editors: Simone Meier, Jennifer M. Freedman

To contact the reporter on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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