German business sentiment brightened in November, easing concerns that German's economy is in the doldrums.
A business climate index by the influential Ifo Institute, a Munich-based think tank, rose to 104.7 in November, up from 103.2 in October when it hit its lowest level in almost two years and a sixth consecutive monthly decline.
The November figures reverse that decline and come in above forecasts by analysts polled by Reuters of 103.0.
The German DAX traded 0.5 percent higher after the data was released with investor sentiment buoyed after more worrying data from Germany recently.
Business output fell markedly in Germany in November -- to a 16-month low, according to data released by Markit last week -- adding to disappointing recent growth figures for the largest economy in the euro zone.
Read MoreEuro zone business output fails to meet forecasts
The economy narrowly missed entering a technical recession after data showed it expanded by 0.1 percent in the third quarter, after a contraction in the second quarter.
Following the data, Holger Schmieding, chief economist atBerenberg Bank, told CNBC's "Worldwide Exchange" that the datawere important for a number of reasons.
"Firstly, theeconomic weakness in Europe over the last six or seven months hasbeen largely [from] Germany so positive German numbers are exactlythe turnaround needed. Secondly, the German weakness itself wasfocused on business investment itself and investment is driven byexpectations and now that we have , after six months of decline,the first and significant rebound in expectations doessuggest that business investment can start to go up again at theend of this year and in the first quarter of 2015."
"It's just one month but the data suggest the worst could be over," he added
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld