German investor sentiment hits 12-month high in February

INVESTOR sentiment in Germany rose for the fourth month in a row to reach a 12-month high in February, driven by the feel-good effects of the latest policy moves by the European Central Bank and better-than-expected economic data, a survey found Tuesday.

The widely watched investor confidence index calculated by the ZEW economic institute rose by 4.6 points to 53.0 points in February, its highest level since February 2014, ZEW said in a statement.

“Quantitative easing by the European Central Bank and unexpectedly high economic growth in the fourth quarter of 2014 have improved sentiment among financial market experts,” said ZEW president Clemens Fuest.

“On the other hand, the intensification of the Ukraine crisis and the collision course of the new Greek government are dampening expectations,” he added.

The ECB last month announced a massive bond purchase programme, known as quantitative easing or QE, in a bid to boost inflation in the 19 countries that share the euro.

And sentiment has also been boosted by stronger than expected German economic growth of 0.7 percent in the fourth quarter of last year.

For the survey, ZEW questions analysts and institutional investors about their current assessment of the economic situation in Germany, as well as their expectations for the coming months.

The sub-index measuring financial market players’ view of the current economic situation in Germany jumped by 23.1 points to 45.5 points in February, its highest level since July 2014.

A frequent criticism of the ZEW index is that it can be volatile and is therefore not particularly reliable.