Growth in Europe's largest economy appeared to be picking up speed after German factory orders expanded for a second month.
Published monthly by the Deutsche Bundesbank, factory orders – which include data on shipments, inventories, and new and unfilled orders – rose 1% month on month. Not as sharp an advance as February's 3.5%, but ahead of market forecasts of 0.8%.
Orders rose at an annual rate of 2.4% after rising 4.7% in the previous month.
Subdued first quarter
The first quarter, however, remained subdued after January's sharp drop of 6.7% – the largest single month decline since January 2009.
Economists said that growth in February and March was driven by an increase in foreign factory orders, showing that the German economy remains largely reliant on foreign demand.
Analysts at Barclays Capital said in a note that the data indicated "the German economy remains highly vulnerable to a slowdown in global trade either through protectionism or weaker demand in Germany’s main export partners, such as China, the UK or the US".
Barclays added, however: "Given strong GDP growth, rising wages and a booming labour market, the German economy should slowly rebalance towards domestic demand, which would help to diversify the economy in the medium term."
Stocks fall to profit taking
The stronger than expected data helped German stocks minimise their losses during a session of profit taking which left the Xetra Dax 30 index down 0.3%, with banks among the worst performers.
Meanwhile, the victory of Emmanuel Macron in the French Presidential election did little to boost markets. Having made strong gains since the first round of voting on April 23, investors were in the mood to take profits as analysts focused on the challenges ahead for Mr Macron and forthcoming political risk events.
Political risk remains
"For the coming months, we believe that political risk has eased, but not disappeared," said Monica Defend, head of global asset allocation research at Pioneer Investments.
"The electoral cycle in Europe – including political developments in Italy which represents a potential source of instability – suggests that investors should continue to keep hedging strategies in play to protect their assets from downside."
The euro fell 0.5% to $1.0939 against the dollar and was down 0.4% against the pound at €1.1846.
France's CAC 40 stock index was among Europe's worst performing, down 1%, with banks among the biggest losers.