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Political uncertainty weighs on euro zone sentiment: Sentix

Reuters

BERLIN (Reuters) - Investor sentiment in the euro zone deteriorated in December due to political uncertainty over the future of the 19-member currency bloc, a survey showed on Monday.

The Frankfurt-based Sentix research group's euro zone index fell to 10.0 points after reaching a year high of 13.1 in November. The December reading undershot the consensus of a stable reading in a Reuters poll of analysts. <EUSTCS=ECI>

"The euro zone is self-absorbed and preoccupied with its own voters. Austria, Italy and also the important elections in 2017 are creating uncertainty," Sentix said in a statement.

"Every election is declared as being a vital vote for or against the euro and this clouds the outlook for investors and companies who would prefer a clear picture for investment decisions."

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Investors viewed the euro zone's current conditions more skeptically, with a sub-index falling to 8.3 in December from 12.3 in November. Expectations for economic developments in the euro zone also deteriorated, edging down to 11.8 from 14.0.

An index tracking Germany, the euro zone's largest economy, fell to 27.8 in December from 29.2 in November.

The survey contrasts with the Ifo business sentiment index published on Nov. 24 that showed company executives remaining upbeat in the face of increased uncertainties following Donald Trump's victory in the U.S. presidential election.

Sentix polled 1,005 investors between Dec. 1 and Dec. 3, meaning the election results of the Italian referendum and the Austrian presidential run-off are not reflected in the survey.

In Italy, the euro zone’s third-largest economy, Prime Minister Matteo Renzi said he would resign after suffering a crushing defeat in a referendum on Sunday on constitutional reform, raising fears of political turmoil.

However, Austrians rejected a far-right candidate in a presidential election in favor of a pro-European environmentalist.

(Reporting by Michael Nienaber; Editing by Madeline Chambers and Toby Chopra)