FRANKFURT--German business sentiment unexpectedly increased in November, a closely watched survey showed, suggesting Europe's largest economy is slowly finding its footing after struggling to expand in recent months.

The Ifo Institute said Monday that its monthly business confidence survey rose to 104.7 from 103.2 in October, breaking a string of six-straight monthly declines. Economists surveyed by The Wall Street Journal had expected a reading of 103.

"The downturn in the German economy has ground to a halt for the moment at least," said Hans-Werner Sinn, president of the Ifo Institute.

Germany's economy stalled in the spring and summer, with a slight contraction in output during the second quarter offset by a small increase in the third. Many analysts expect only weak growth in the fourth quarter.

Still, economists expect Germany's expansion to gather pace next year, aided by low unemployment, falling oil prices and the recent depreciation of the euro, which should aid the country's exporters.

Monica Houston-Waesch contributed to this article.

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