The ZEW Center for European Economic Research released its economic sentiment index for Germany and the Eurozone on Tuesday. Germany's ZEW economic sentiment index declined to 10.2 in January from 16.1 in December, beating expectations for a fall to 9.0.
The assessment of the current situation in Germany rose by 4.7 points to 59.7 points.
"The beginning of the new year is characterised by capital market turmoil in China, which has also led to significant share price declines in Germany. As in the previous year, weak economic growth in China and other important emerging markets puts a strain on Germany's economic outlook," head of the "International Finance and Financial Management" Research Department at ZEW, Sascha Steffen, said.
Eurozone's ZEW economic sentiment index dropped to 22.7 in January from 33.9 in December, missing expectations for a decline to 27.9.
The assessment of the current situation in the Eurozone rose by 2.1 points to -7.5 points.