ZEW German Sentiment Hurt by Brexit Uncertainty, Falls Unexpectedly
German economic sentiment fell unexpectedly -- and sharply -- in July amid concerns about the country's export prospects following last month's referendum on the U.K. leaving the 28-country European Union.
The monthly gauge of investor confidence towards Europe's largest economy by the ZEW research institute in Mannheim showed a July reading of minus 6.8 points.
That figure is 26.0 points below the reading for June and the indicator's lowest level since November 2012.
It's also well short of the most pessimistic forecasts., with Credit Suisse economists last week betting on 10.0 and the first report since the U.K.'s Brexit referendum.
"The Brexit vote has surprised the majority of financial markets," said ZEW's president Achim Wambach, in a statement. "Uncertainty about the vote's consequences for the German economy is largely responsible for the substantial decline in economic sentiment."
He added that in particular, concerns about the country's export prospects and the stability of the European banking and financial system "are likely to be a burden on the economic outlook."
Germany's benchmark DAX stock index was down 1.28% at 9,993.97 in late morning Frankfurt time, led by declines in Deutsche Bank (DB) - Get Report , carmaker Volkswagen (VLKAY) and airline Deutsche Lufthansa (DLAKY) .