Economic sentiment in the eurozone deteriorated more than expected in January as an economic slowdown in China and its impact on the world economy unsettled investors, survey data released on Monday showed.
The Frankfurt-based Sentix research group's index, tracking morale among investors and analysts in the euro zone, fell to 9.6 in January from 15.7 in December, undershooting the consensus forecast in a Reuters poll for a reading of 12.2.
It marked the first decline since October and was the weakest reading since January 2015.
"There are dark clouds coming up from the East … Because serious doubts are justified that China is not only experiencing a growth slowdown, but possibly a really hard landing," Sentix said in a statement China rocked the world markets at the start of 2016 when it allowed the biggest fall in the yuan in five months, pressuring regional currencies and sending stocks around the globe tumbling as investors feared it would trigger competitive devaluations.
The move also reinforced concerns that the Chinese economy, the world's second largest, may be even weaker than had been imagined.
The Sentix survey of 1,041 investors was conducted between Jan. 7 and Jan. 9.
A sub-index of expectations for the euro zone economy plunged to 6.3 from 18.0 in December, the lowest level since November 2014.
However, investors' assessment of the current situation deteriorated only slightly to 13.0 from 13.5 in December.
An index tracking Germany, Europe's biggest economy, fell to 18.1 from 22.7, the weakest reading since October.