RPT-UPDATE 1-German investor mood drops to 15-month low in July

(Repeats to add graphic)

* Forward-looking sentiment index lowest since April 2009

* Euro falls vs dlr after weaker-than-expected ZEW reading

* Current conditions strongest since July 2008

By Sakari Suoninen and Christiaan Hetzner

MANNHEIM, Germany, July 13 (BestGrowthStock) – German analyst and
investor sentiment fell in July to its lowest since April 2009
on concerns of weaker economic growth this year, a key survey
showed on Tuesday, sending the euro down against the dollar.

The Mannheim-based ZEW economic think tank’s monthly
forward-looking poll of economic sentiment tumbled to 21.2 from
28.7 in June. A Reuters poll had pointed to a fall to 25.0.

The ZEW cited investor concerns about the fallout from the
euro zone debt crisis and financial market turmoil as being
behind the drop. The survey reinforced expectations that Germany
is heading for a slowdown after a strong second quarter.


For a graphic showing German ZEW and GDP growth:


“We’re in the process of reaching the peak of the economic
cycle right now,” said HSBC Trinkaus economist Thomas Amend,
adding that a dip in global sentiment indicators could point to
headwinds ahead for Germany’s export industry.

“A further danger is that the banking sector hasn’t emerged
from the crisis. That could weigh on lending in the second
half,” he added.

A separate ZEW gauge of current conditions rose to 14.6 from
-7.9 in June, surpassing expectations for a reading of -1.5.

Figures released last week showed German trade surged in May
and industrial output jumped more than expected.

However, business sentiment fell slightly in May, as a
deterioration in companies’ expectations suggested they are
worried by the euro zone crisis.

Despite the drop in investor morale, ZEW economist Michael
Schroeder said expectations remained relatively high.

“There is no indication of a double-dip scenario from the
results of this survey,” he told reporters.

Supporting Schroeder’s comments, carmaker BMW raised its
2010 pretax profit and sales outlook on Tuesday, citing
improving conditions in international car markets.

“We think that the second quarter growth will have been very
strong,” said Commerzbank economist Ralph Solveen. “It’s
unlikely, though, that this pace will continue into the third
and fourth quarters. Things will slow down a bit.”

The ZEW index was based on a survey of 287 analysts and
investors and conducted between June 28 and July 12, ZEW said.
(Reporting by Sakari Suoninen and Christiaan Hetzner; Editing
by Hugh Lawson)

RPT-UPDATE 1-German investor mood drops to 15-month low in July