German investor sentiment improves sharply

Investor sentiment in Germany rose for the second month in a row in October, data showed Tuesday, as recent uncertainty on the financial markets has abated somewhat. The widely watched investor confidence indicator calculated each month by the ZEW economic institute climbed to minus 11.5 points this month from 18.2 points in September. The reading was better than expected. Analysts polled by Dow Jones Newswires had forecast a more modest rise to minus 15 points in October. "This is the second consecutive rise in the indicator," ZEW said in a statement. "It shows that, from the point of view of financial market experts, the economic risks for Germany have lessened somewhat. The easing of uncertainty on the markets in recent weeks has contributed to this," the statement said. While there were still more analysts predicting a cooling down of the German economy than an improvement, "the proportion ... has shrunk," ZEW added. However, a separate indicator measuring financial market players' view of the current economic situation in Germany fell further to a reading of plus 10.0 points in October from plus 12.6 points in September. For the survey, ZEW questions analysts and institutional investors about their current assessment of the economic situation in Germany, as well as their expectations for the coming months. A frequent criticism against it is that the index can be volatile and is therefore not particularly reliable.