German investor morale unexpectedly falls in April - ZEW

BERLIN (Reuters) - German investor sentiment unexpectedly fell in April as financial markets see more restrictive credit conditions in the coming months, the ZEW economic research institute said on Tuesday.

The institute's economic sentiment index dropped to 4.1 from 13.0 in March.

A Reuters poll had pointed to an April reading of 15.3.

"The ZEW Indicator of Economic Sentiment has dropped noticeably and currently points to an unchanged economic situation for the next six months," ZEW President Achim Wambach said.

The assessment of the economic situation in Germany, however, improved considerably, rising to -32.5 points from -46.5 the month before and above analysts' prediction of -40.0.

Despite the improvement, the economic situation is still considered relatively negative, the report said.

"The still high inflation rates and the internationally restrictive monetary policy are also weighing on the economy," Wambach said.

On the positive side, Wambach said the danger of an acute international financial market crisis seems to have been averted and earnings expectations for banks and insurance companies have improved compared to the previous month.

German Finance Minister Christian Lindner said on Monday at an event of the association of German banks that there was no reason to worry about financial stability in Germany following the banking turmoil in the United States and with Credit Suisse.

"There isn't a banking crisis," he said. "Our banks have a strong capital basis."

(Reporting by Maria Martinez, Rachel More and Miranda Murray, Editing by Friederike Heine and Susan Fenton)