Euro zone investor morale improves unexpectedly in Sept - survey

BERLIN (Reuters) - Investor sentiment in the euro zone improved unexpectedly in September as concerns about the potential impact of a widening car emissions scandal in Germany and the development of the U.S. economy faded into the background, a survey showed on Monday.

The Frankfurt-based Sentix research group said its euro zone index rose to 28.2 points from 27.7 points in August. That compared with the consensus forecast of 27.4 in a Reuters poll.

"The data from Germany and the United States last month was disappointing. In both regions, the trend is reversing moderately," Sentix said.

Investors viewed the euro zone's current conditions a bit more sceptically, with a sub-index edging down to 39.8 in September from 40.0 in the previous month.

But expectations for economic developments in the euro zone improved, rising to 17.3 from 16.0, the survey showed.

An index tracking Germany, the euro zone's largest economy, rose to 34.0 in September from 33.2 in August.

"Low interest rates, increased state spending on refugees and high government subsidies are driving the domestic economy," Sentix said. "In addition, Germany is still benefitting from a relatively weak euro."

The survey chimed with last month's Ifo business sentiment index that showed German business confidence remained broadly stable after climbing to three record highs in a row, suggesting that a consumption-led upswing will continue.

Sentix polled 983 investors from Aug. 31 to Sept. 2.

(Reporting by Michael Nienaber; Editing by Michelle Martin)