Eurozone sentiment falls for fifth straight month

City A.M. Reporter
Eurozone sentiment fell for a fifth straight month in August to touch its lowest level in over three years amid ongoing worries about the bloc's debt crisis, an index from the Sentix research group showed today.

Sentix said its monthly index tracking investor sentiment in the 17-nation currency bloc dipped to -30.3 in August, down from -29.6 in July, but slightly better than a consensus forecast for a drop to -31.0.

Comments from European Central Bank (ECB) President Mario Draghi on Thursday indicating that the ECB could begin buying government bonds again to reduce surging borrowing costs in Spain and Italy appeared to have helped limit the damage.

The expectations component of the index improved slightly for the first time in many months, rising to -23.3 from -24.0 in July.

"The main reason for this was probably ECB President Draghi's unusually energetic defence of the euro," Sentix said in its report.

"The survey results suggest that this reassured investors, especially institutionals, that more decisive steps will follow (also from politicians) to save the common currency."

Still, a sub-index on the current situation continued to fall in August, dipping to -37.0 from -35.0 the previous month. This took the overall index to its lowest level since July 2009.