BERLIN (Reuters) - Euro zone sentiment improved for a fourth consecutive month in December boosted by a rise in expectations to their strongest level since May 2011, as investors took heart from pledges by the European Central Bank and politicians to stand by the euro.
Sentix research group said on Monday its index tracking investor sentiment in the euro zone strengthened to -16.8 from November’s -18.8, though it fell short of expectations in a Reuters poll that mood would rise to -16.0.
A sub-index of current euro zone sentiment rose modestly to -31.0 from -31.3, while the expectations component climbed significantly to -1.5 from a previous -5.5.
“The main reasons for the improvement in expectations are the ECB’s measures announced in the summer. It has taken private investors time to recognize that the ECB’s clear pledge on an ”irreversible“ euro has led to a turn around,” Sentix said.
“All doubts are by no means overcome, but there are increasing signs that some things are improving.”
Late last month the European Union and International Monetary Fund agreed to keep Greece afloat inside the euro zone, by reducing its debt now and hinting at official debt relief to come later, removing the biggest risk of a financial shock that could re-ignite market turmoil.
The Greek deal, coupled with ECB promises to do what it takes to preserve the euro, have boosted market sentiment and brought down the yields of struggling states such as Italy.
A separate index for Germany showed sentiment rising to 13.0 in December from 9.4 last month. An index for investor sentiment in the United States rose to 7.1 from 5.0, one for Asia excluding Japan rose to 26.3 from 21.9, and an index for Japan rose to -4.3 from -11.7.
Reporting by Alexandra Hudson