Germany's investment professionals showed less optimism in May for the second month in a row.
The ZEW institute's sentiment index fell to 41.9 points from 53.3 in April, the sharpest drop since August last year.
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ZEW President Clemens Fuest said that "financial market experts have adjusted their optimistic expectations downward" after slightly disappointing growth figures for Germany and unsettling swings recently in stock and bond prices.
The survey was based on responses from 225 investment analysts during the period May 4-18.
Analyst Carsten Brzeski at ING notes the index remains at a high level and says there are "very few arguments in favor of changing our positive take on the German economy."
Europe's biggest economy expanded 0.3 percent in the first three months of the year from the quarter before.