A closely watched survey shows an unexpectedly sharp rise in German investor confidence, suggesting increasing optimism over how financial markets will perform in the coming months.

The ZEW institute said Tuesday its indicator of economic sentiment rose by 24.6 points in January over the month before to an overall 31.5 points - its highest level since May 2010. Economists had predicted a more modest rise to 12 points.

ZEW President Wolfgang Franz says experts "seem to expect that the positive sentiment on the financial markets may soon result in companies realizing investments that had been postponed."

The institute asked 272 analysts about their expectations for the next six months.

Their assessment of the eurozone's economic situation as a whole also rose, jumping 23.6 points over December to 31.2 points.