German Investor Confidence Plummets

By Stewart Douglas

Investor confidence has fallen beyond analyst predictions this month, according to figures released in Germany today.

An influential index was published today reflecting a dramatic decline in confidence across German markets, as analysed as an outlook for future trading.

The ZEW institute study, which examines market expectations, was published at a decline of 6.9 points on its indexation figure in August.  Last month, the figure settled at 10.4 on the index, reflect the significant decline in German investor confidence.

The decline had been forecast to come out at around 3 points, reflecting an overwhelming drop as compared to widespread expectations previous to the announcement of the figures today.

Analysts have put much of the decline down to the ongoing struggle in the US mortgage market, with sub-prime lending continuing to haunt investment decisions across the globe.

The bleak picture across the pond, which has had such a profound impact on economies around the world, including Europe, is predicted to continue to plague markets over the coming weeks in what could be seen as alarming news for those with shares - in particular in banking and finance sectors.

However, experts have been quick to point out that despite the far reaching implications of the sub-prime problem, it is an issues for the US economy to deal with, rather than European sub-economies.

Whilst this may be an ‘easier said than done’ attitude, many top economists have been quick to defend the comprehensive bleak figures from the ZEW report, suggesting that investors could soon turnaround if trading continues to improve through this week.

After some positive trading results through the first half of this week, the bravest investors around the world are resuming active trade in the wake of last week’s disastrous sell-offs.

And with many corporate pension funds riding on the success of trading, analysts can only hope they are proved wrong in the coming weeks and months.