Optimism About German, Eurozone Economies Surges

Confidence among European analysts and institutional investors about economic growth in Germany over the next six months soared in January, according to the Centre of European Economic Research (ZEW).

The group's sentiment index for Germany, which jumped 22.6 points from November to December, surged 24.6 points to 31.5 this month. That marked the highest reading since May 2010. The index had been in negative territory for 14 of the 18 previous months.

ZEW says the index confirms December's indication that optimism is rising that Germany will avoid recession and grow at a moderate pace this year.

Analysts expect the country's businesses to resume the investment they postponed during Europe's debt crisis, the group opines. But ZEW adds that those companies remain concerned about the fragile economies of their trade partners in the region.

Among the research group's other findings:

The index of sentiment about the eurozone's six-month outlook soared 23.6 points to 31.2.

Three-quarters of survey respondents say the eurozone's economy is still "bad."

Optimism about the U.K.'s economic prospects advanced 17 points to 18.4.

Respondents expect the euro to continue to strengthen against the dollar, yen, Swiss franc and British pound.

* Confidence in the auto industry improved 22 points but remains bleak at a reading of -26.6. Nearly 40% of those polled say conditions will worsen, and almost half predict no change.