The mood among German analysts and investors improved more than expected in October, a survey showed on Tuesday, suggesting traders are more upbeat about the growth prospects of Europe's biggest economy.
Mannheim-based ZEW said its monthly survey showed a rise in its economic sentiment index to 6.2 points in October after an unchanged reading of 0.5 points the previous month. This was better than the Reuters consensus forecast for a reading of 4.3.
A separate gauge measuring investors' assessment of the economy's current conditions jumped to 59.5 points from 55.1 in September. This was also stronger than the Reuters consensus forecast which predicted a reading of 55.5.
"The improved economic sentiment is a sign of a relatively robust economic activity in Germany", ZEW President Achim Wambach said in a statement.
"However, positive impulses from industry and exports should not distract from existing political risks," Wambach added. "In particular, the risks concerning the German banking sector are currently a burden to the economic outlook."
The ZEW index was based on a survey of 213 analysts and investors conducted between Sept. 26 and October 10.