A recent survey by Sentix has shown that investor morale in the eurozone has unexpectedly dropped in May, with inflation and energy concerns upending expectations of a rebound.
Sentix's index for the eurozone fell to -13.1 points in May from -8.7 in April, while analysts had expected a rise to -8.0 this month.
The index on expectations decreased from -13.0 in April to -19.0 in May, its lowest level since December 2022, according to the survey.
The barometer has plunged into negative territory in the wake of Russia's invasion last February.
According to Sentix, energy shortages, consumer spending dampening due to inflation, and consumer concerns about forced investments in heating systems to mitigate climate change are among the factors that have contributed to the weak spring.
A raft of policies is being brought in across the zone, including Berlin's ruling coalition's decision in March to make almost all newly installed heating systems in Germany run on 65% renewable energy from 2024, both in new and old buildings.
This move is considered an important step towards achieving carbon neutrality, but it is also a reason behind the low investor morale.
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