Euro zone sentiment dips in April on Cyprus worriesMonday 08 April 2013 16.53
Euro zone sentiment fell for a second consecutive month in April due to concerns over the Cyprus bailout, Sentix research group said today.
Sentix said its monthly index tracking investor sentiment in the euro zone slid to -17.3 this month, its lowest level since last November and below forecasts for April of -13.1. The index stood at -10.6 in March.
"Just as the Italian election pushed down the index in March, so in April the Cyprus problem, among other issues, proved an additional burden," Sentix said in a statement.
Cyprus has forced heavy losses on wealthier depositors and agreed to the winding down of its second largest bank in order to secure a €10 billion bailout from the European Union and the International Monetary Fund.
Italy, the euro zone's heavily indebted third largest economy, remains in political limbo after a February election gave no bloc enough votes to govern alone.
A Sentix sub-index of euro zone expectations fell to 0.5 in April from 8.3 in March. Current conditions stood at -33.5, down from -27.8 in March.
A separate index for Germany also showed sentiment souring in the euro zone's largest economy. It fell to 17.6 this month - its lowest level since January - from 24.5 in March.
Sentiment indicators for Germany have generally been positive so far this year, suggesting the economy is picking up in the first quarter, though the widely watched Ifo business climate index dipped in March.
Outside the euro zone, the Sentix index for Japan hit its highest level since January 2011 as the Bank of Japan embarked on the world's most aggressive monetary stimulus worth some $1.4 trillion.
The US also edged higher but Asia, excluding Japan, drifted lower. "The global recovery seems still intact but the risks for disruption in this recovery have clearly increased," Sentix said.