(Sharecast News) - Investor sentiment across the eurozone deteriorated dramatically over recent weeks following the outbreak of the war between Iran and the US-Israel, with fears of a possible recession back on the agenda, according to a monthly Sentix survey.
The overall Sentix economic index, which tracks confidence levels among institutional investors and analysts across the single-currency region, dropped 16.1 points to -19.2 in April, from -3.1 in March, marking the lowest level in 12 months.
Sentix said the significant fall was "driven by a veritable collapse in economic expectations".
Sentiment levels surrounding the German economy in particular took a big hit, with the national economic index falling 15.6 to -27.7, with economic expectations now at -16.8 points, its lowest since September 2024.
Sentix surveys further afield painted a similar picture, with confidence levels across both established and emerging markets under pressure and global sentiment measures at their lowest since last spring.
"Immediately following the outbreak of the Iran War, initial signs of uncertainty began to emerge in the first-mover index in early March. Just four weeks later, a massive slump has now followed: the sentix Economic Sentiment Index for April 2026 shows a significant decline," the report said.
"The sharp drop in expectations is weighing particularly heavily, pulling the overall index for the eurozone down considerably. Investors are increasingly recognising that the risk of another recession is coming back into focus."