German Investor Confidence Falls to 3-Year Low on Iran Energy Fears

German investor confidence plunged to its lowest level in more than three years in April, driven by escalating concerns over energy supplies amid the Iran war. The ZEW economic expectations index fell 16.7 points to minus 17.2, according to a survey by the Centre for European Economic Research released Tuesday. The reading, based on responses from 192 analysts and institutional investors, marks the second consecutive monthly decline and is the weakest since December 2022, when Russia's invasion of Ukraine triggered soaring energy costs that battered manufacturers.

The downturn reflects growing unease about the broader economic fallout from the Middle East conflict, including a surge in oil and gas prices following U.S. and Israeli attacks on Iran and the near-total closure of the Strait of Hormuz. "Expectations are turning negative," said Achim Wambach, president of the ZEW institute. He added that worries over long-term energy shortages are holding back investment and diminishing the effectiveness of government stimulus measures.

While the automotive sector showed stable outlooks, energy-intensive industries faced steeper declines. Expectations for the chemical and...