MANNHEIM, Germany, Feb 19 (Reuters) - German analyst and

investor sentiment soared to its highest level since April 2010,

beating all expectations with a third successive increase and

signalling that financial markets are confident Europe's largest

economy has turned a corner.

The Mannheim-based ZEW think tank said on Tuesday its

monthly poll of economic sentiment rose to 48.2 points from 31.5

in January, beating even the highest expectation in a Reuters

poll with a median forecast for 35.0 points.

The index was based on a survey of 272 analysts and

investors conducted between Feb. 4 and 18, ZEW said.

The better-than-expected reading boosted the euro and

European shares and sent German Bund futures lower.

MARKET REACTION

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ECONOMISTS

RALF UMLAUF, HELABA

'The numbers are gratifying, especially as the positive

consensus estimate was clearly exceeded again. For sure the

decline in the current conditions is disappointing, but the mean

value from both components provides a very benign indication for

the Ifo business climate which is to be published on Friday.

'Expectations of an economic recovery after the weak final

quarter of 2012 are underpinned. Germany should in this respect

be able to avoid a recession.'

BACKGROUND

* For a story on Germany's Bundesbank seeing some German

growth in Q1 and a pick-up in the pace later this year, click on

* For a story on Germany's economy shrinking the most since

the 2009 financial crisis, click on

* For a story on German firms being optimistic on exports

despite a strong euro, click on

* For a story on Germany's Economy Ministry saying the

German economy will gradually regain momentum this year, click

on

* For a story on Germany's trade surplus soaring, click on

* For a story on manufacturing pushing German industry

output slightly up in December, click on

* For a story on euro zone demand pushing German industry

orders higher, click on

* For a story on Germany's private sector expanding at its

fastest rate since June 2011, click on

* For a story on German manufacturing suggesting a return to

economic growth, click on

* For a story on German retail sales plunging in December,

click on

* For a story on German unemployment falling in January,

click on

(Reporting by Berlin bureau)

Keywords: GERMANY ZEW/

(MichelleHannah.Martin@thomsonreuters.com)(+49 30 2888 5223)(Reuters Messaging: MichelleHannah.Martin.thomsonreuters.com@reuters.net)

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