Investor mood drops less than feared

German analyst and investor sentiment fell less sharply than expected in February, a closely watched survey showed yesterday, suggesting Europe's largest economy may be more resilient than feared.

The Mannheim-based ZEW economic think tank's monthly poll of economic sentiment fell for the fifth month running to 45.1, down from 47.2 in January as renewed risk aversion in financial markets weighed on sentiment. The figure was well ahead of a consensus forecast in a Reuters poll of 40 economists for a fall to 42.

Despite the fall in the index, which was based on a survey of 278 analysts and investors conducted between February 1 and February 15, ING Financial Markets' economist Carsten Brzeski said the German economy's "underlying trend remains good".

The country's economy stalled in the final quarter of last year. "Today's correction of the ZEW indicator reflects the return of risk aversion and the fiscal problems in Greece and other eurozone countries," Brzeski said.

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