Euro zone investor morale slumps to lowest level since July 2020

BERLIN (Reuters) - Investor morale in the euro zone fell to its lowest level in nearly two years in April, a survey showed on Monday, pointing to the beginning of a recession in the second quarter of 2022.

Sentix's index for the euro zone fell to -18.0 in April from -7.0 the previous month, hitting its lowest level since July 2020. A Reuters poll had pointed to a reading of -9.2.

A current conditions index fell to -5.5 from 7.8, its lowest level since April last year, while an expectations index fell to -29.8 from -20.8, its lowest level since December 2011.

While the dip in March's morale had been expected due to the start of the war in Ukraine, the strong fall in sentiment in April once again puts investors on the back foot, said Sentix.

The conflict and related sanctions and uncertainties are pushing the euro zone economy towards a recession, it added.

"Investors do not expect that the central bank can rush to the rescue with a more relaxed, more expansive monetary policy because of the still considerable pace of inflation growth."

Sentix said morale was dropping globally although nowhere as sharply as in the euro zone.

"No region is able to resist the negative momentum at the moment, even the important Asian region is already fighting stagnation," it said.

Sentix surveyed 1,249 investors from March 31 to April 2.

(Reporting by Miranda Murray and Sarah Marsh; Editing by Paul Carrel)