German investor sentiment surprises with strong rebound
German investor morale defied expectations and rebounded in April, a closely watched survey has shown, as market participants start to see “light at the end of the tunnel”.
The German Zew think tank said its gauge of investor morale bounced sharply up to 28.2 from a reading of minus 49.5 in March. Analysts had been expecting a score of minus 42.3.
Investor sentiment in the Eurozone as a whole also rebounded after falling to a record low in March. The Eurozone morale reading was 25.2 in April compared to minus 49.5 in March.
However, a gauge that measures German investors’ views of the current economic situation plunged even further than last month, hitting minus 91.5 in April from minus 41.3 in March. The plunge was worse than analysts had predicted.
Nonetheless, Zew president Achim Wambach said that “financial market experts are beginning to see a light at the end of the very long tunnel”.
Germany has suffered fewer deaths from coronavirus than many of its European neighbours. Around 4,500 people have died compared to more than 16,000 in the UK and 20,000 in France.
Investors received a boost last week when the German government said it would start to reopen parts of the economy. Some shops reopened yesterday.
Although the country’s benchmark Dax stock index is 2.1 per cent lower this morning due to market gloom about oil prices, it has staged a solid comeback in recent weeks.
The Dax plunged almost 40 per cent between the middle of February and the middle of March. But it has regained more than 20 per cent since 18 March.
The better-than-expected survey data came ahead of a key EU meeting on Thursday when countries will try to thrash out a united approach to supporting one another through the coronavirus downturn.
Countries such as Italy, France and Spain have been pushing for jointly issued debt, known as coronabonds, to lift some of the strain from weaker Eurozone members. However, Germany and the Netherlands are deeply opposed to sharing financial liabilities.