Investor confidence in Germany rose for the second month in a row in April as favourable economic news from China helps stabilise sentiment in Europe's biggest economy, a leading survey showed on Tuesday.

The investor confidence index calculated by the ZEW economic institute increased by 6.9 points to 11.2 points in April, the think tank said in a statement.

Analysts had projected a slightly more modest rise in the index to around 8.0 points this month.

"Surprisingly positive economic news from China seem to have improved the sentiment amongst financial market experts," said ZEW's head of international finance and financial management, Sascha Steffen.

"On balance, however, the continued poor growth in China and other important emerging markets continues to be a burden for the German export industry. Furthermore, concern about Britain's possible exit from the EU seems to be having a negative impact," Steffen added.

For the survey, ZEW questions analysts and institutional investors about their current assessment of the economic situation in Germany, as well as their expectations for the coming months.
While financial market players' expectations are on the rise, their view of the current economic situation in Germany fell by 3.0 points to 47.7 points in April, ZEW said.

Analysts said the new sentiment data suggested that the current moderate recovery in Germany is set to continue.

"The high level of skepticism at the start of the year has declined thanks to more positive news from China and the United States," said BayernLB economist Stefan Kipar.

"Nevertheless, the ZEW data sugggest that the Brexit issue is increasingly moving onto the radar screen for financial markets."

Britain is scheduled to hold a referendum in June on whether to stay in the EU.

Capital Economics economist Jennifer McKeown said the fact that financial market players' perception of the current situation had declined "supports our view that growth will slow this year."