LONDON (dpa-AFX) - Business sentiment in the eurozone improved surprisingly significantly in January. According to an initial calculation, the Purchasing Managers' Index calculated by S&P Global rose by 0.6 points to 50.2 points, as S&P announced in London on Friday. Economists had on average only expected an increase to 49.7 points. The overall indicator has thus risen just above the expansion threshold of 50 points. It therefore signals an increase in economic activity.

The indicator for industry has improved. However, it continues to signal a contraction. In the service sector, on the other hand, the value fell slightly.

"The start to the new year is slightly encouraging," commented Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. "After two months of contraction, the eurozone economy has returned to a cautious growth path."

In Germany, both the indicator for industry and the service sector improved. In France, only the industrial indicator improved, while the services index deteriorated.

"Overall, today's figures are a hopeful sign of an imminent turnaround for the better in the European economy," commented Vincent Stamer, economist at Commerzbank. However, he expects only a moderate development, as the sentiment indicators are still at a low level. "The positive effect of lower key interest rates should only fully unfold in the second half of the year and the economy should pick up somewhat more strongly," writes Stamer.

The data also gave rise to confidence on the financial markets. The euro rose above the 1.05 US dollar mark. The DAX rose slightly. Yields on government bonds from the eurozone rose slightly.

The development at a glance:

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Region/Index January Forecast previous month

EURORAUM

Total 50.2 49.7 49.6

Industry 46.1 45.4 45.1

Services 51.4 51.5 51.6

GERMANY

Industry 44.1 42.7 42.5

Services 52.5 51.0 51.2

FRANCE

Industry 45.3 42.5 41.9

Services 48.9 49.4 49.3

(figures in points)

/jsl/men