Frankfurt shares have been heavily sold recently

According to research firm the Zew Institute, its main gauge of confidence was at -39.5 points in February, up from -41.6 points in January.

February's reading is still well below the survey's average of 30.7 points, but was much better than expected.

Zew said the figures indicated that the global financial crisis would not affect Germany's long-term prospects.

Stability return?

There have been mounting fears that the cautious economic recovery in Germany, the largest in the 15-nation euro bloc, would be derailed by problems in the US, a key export market.

At the same time, a stronger euro was also expected to dampen demand for German-made products.

The financial experts expect that the worst will be over in six months Zew Centre for European Economic Research See Germany's Dax stock index

However, Zew forecast an improving environment for German exporters over the next six months.

"The positive development of the economic sentiment for Germany signals that the current crisis is not expected to trigger a downward spiral for the German economy," said Zew president Professor Wolfgang Franz.