Sentix Investor Confidence Falls on Euro-Area Contagion Fears
European investor confidence fell in December from a three-year high the previous month as concern increased that the euro-area debt crisis may spread to Spain and other nations, the Sentix research institute said.
An index measuring sentiment in the 16-nation euro region declined to 9.7 from 14 in November, Limburg, Germany-based Sentix said in an e-mailed statement today. Economists had forecast a reading of 11, based on the median of nine estimates in a Bloomberg News survey. A gauge of current business conditions dropped to 12.75 from 21.75, and an indicator of expectations rose to 6.75 from 6.50.
European policy makers hold a regular meeting in Brussels today amid disagreements on whether their 750 billion-euro ($1 trillion) rescue fund needs to be increased to stop contagion from Greece and Ireland. The European Central Bank delayed the end of its extraordinary liquidity measures for banks on Dec. 3 in an effort to calm markets.
“The concern over the solvency of European states is making investors much more negative toward the euro-area economy,” Sentix said in the statement.
Belgian Finance Minister Didier Reynders said on Dec. 4 that the bailout fund might be expanded if ministers decide to introduce a larger permanent facility when the current temporary one expires, a move rejected last month by German Chancellor Angela Merkel and French President Nicolas Sarkozy.
The ECB forecasts that the euro-area economy will grow about 1.4 percent next year and 1.7 percent in 2012. Germany, Europe’s largest economy, has led the currency bloc’s recovery this year, with the Bundesbank projecting 3.6 percent growth in 2010.
Sentix’s gauge of global investor confidence rose 2.3 points to 19.1, today’s report showed, with Japan and the U.S. showing a “marked brightening” of investors’ assessments of the current situation.
Sentix said 904 investors participated in its monthly survey, conducted between Dec. 2 and Dec. 4. The results are never revised.
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