European investor confidence rises for first time in four months
European investor confidence rose in July as oil prices fell, the eurozone economy gathered momentum and there are signs that the attempts are finally being made to stop the threat of Greek default from spreading throughout the region.
The index, from German-based Sentix, rose to 5.3 in July from 3.5 in June while another gauge of business conditions in the euro 17 nations also climbed.
The euro region’s economic growth accelerated to the fastest pace in 12 months in the first quarter, boosted by Germany.
This offset the impact of cuts in economies from here to Spain.
Oil prices have fallen about 4pc over the past month while European leaders have authorised an immediate €12bn in loans for Greece.
“It seems that the correction in commodity prices, in particular oil prices, is seen as a relief,” Sentix said in a statement. “Investors’ assessment certainly also profited from the approved support package for Greece.”
European Central Bank President Jean-Claude Trichet reiterated last week that an interest rate hike is due later this week.
“The fear of inflation has significantly fallen from the hysteria levels in February and March,” Sentix said. “This should reduce the pressure on the ECB to increase rates too much.”