German Investor Optimism Gains as Economy and Stocks Power Ahead

LAGOS (Capital Markets in Africa) – German investor confidence rose for a second month as stocks rallied and data signalled that Europe’s largest economy is on track for a solid expansion in the second half of the year.

The ZEW Centre for European Economic Research’s index of investor expectations climbed to 17.6 in October from 17 in September. The reading compares with a median estimate in a Bloomberg survey for an increase to 20.0.

After a lull at the start of summer, Germany’s economy has picked up pace with industrial output increasing by the most in six years in August and services growth accelerating. The DAX Index of stocks index is at a record high and the euro — a source of concern for exporters after it surged this year — is showing signs of stabilizing.

“The improved outlook for the coming six months is not least the result of the surprisingly positive growth figures seen in the previous months,” ZEW President Achim Wambach said in a statement. “German exports, which have already seen a significant rise, are further improved by positive growth figures for Europe.”

Still, uncertainties lie ahead as the European Central Bank debates scaling back its monetary stimulus, European Union negotiations over Brexit struggle to make progress, and global geopolitical tensions persist.

ZEW’s gauge for current conditions in Germany slid in October to 87 from 87.9. A measure for expectations in the euro area declined to 26.7 from 31.7.

Source: Bloomberg Business News