BERLIN (Reuters) - Morale among investors in the euro zone dropped in October to its lowest level in more than six years as stimulus measures taken by central banks failed to allay recession fears, a survey showed on Monday.
The Sentix research group said its investor sentiment index for the euro zone dropped to -16.8 in October from -11.1 in September. That was its lowest level since April 2013 and undershot the Reuters consensus forecast for a reading of -13.0.
“There hasn’t been a positive reaction to the support measures taken by central banks, with economic assessments falling in October on a broad front,” Sentix Managing Director Patrick Hussy said.
In September, European Central Bank chief Mario Draghi pledged indefinite stimulus to revive an ailing euro zone economy. The ECB cut rates deeper into negative territory and promised bond purchases with no end-date to push borrowing costs even lower.
The U.S. Federal Reserve also cut interest rates in September to help sustain a record-long economic expansion but signaled a higher bar to further reductions in borrowing costs.
Investors’ assessment of the current situation plunged to -15.5 from -9.5. That marked a fifth consecutive decline and the weakest reading since the end of 2014.
Their economic outlook also took a hit, with the sub-index measuring this falling to -18.0 from -12.8 the previous month.
“Recession fears are immanent,” Hussy said.
The German economy, Europe’s economic locomotive, contracted in the second quarter and many economists expect it to shrink in the third quarter too. Economists generally define a technical recession as at least two consecutive quarters of contraction.
An index tracking Germany showed investor morale in Europe’s largest economy hitting its lowest level since July 2009.
The survey of 957 investors was conducted from Oct. 3 to 5.
Reporting by Michelle Martin; Editing by Joseph Nasr