Investor confidence in the euro area has deteriorated significantly in August on the background of imposition of economic sanctions against Russia in connection with the annexation of the Crimea and the accusations of supporting rebels in the eastern regions of Ukraine, which according to Western experts downed a passenger airliner of Malaysian Airlines, which has led to the death of 298 people. Another negative factor was the difficult financial condition of Banco Espirito Santo which will receive 6.56 billion euro of help, as well as Argentina's default.
As a result, investor confidence index fell in August to 2.7, versus the expected decline to 9.1. In general, stock markets appear overvalued and a correction is likely to continue in the medium term. The potential of fall of the indexes according to our estimates, is more than 10%.