UPDATE 1-German Nov investor confidence drops for second month

(Adds economist comment, details, background)

MANNHEIM, Germany, Nov 10 (Reuters) - German analyst and investor sentiment worsened more than expected in November, a key survey showed on Tuesday, tempering hopes for a rapid economic recovery.

The Mannheim-based ZEW economic think tank's monthly poll of economic sentiment posted its lowest reading in four months, dropping to 51.1 from 56.0 in October, though it stayed well above the long-term average of 26.9.

The consensus forecast in a Reuters poll of analysts last week was for a fall to 55.0 and analysts said the poorer number reinforced expectations that the euro zone's biggest economy faces another tough period in the first half of next year.

"The growth expectations for ZEW has passed their peak, that was the second decline in a row," said Andreas Rees from Unicredit.

"The growth expectations of the indicator will decline in the next two months. The data signal a moderate slowdown in growth in spring 2010."

The euro EUR= fell against the dollar and Bund futures hit a session high after the data, which was based a survey of 287 analysts and investors and conducted between Oct. 26 and Nov 9.

A separate gauge of current conditions rose to -65.6 from -72.2. A reading of -70.0 had been forecast.

A series of more upbeat indicators for Germany had pointed to the euro zone having emerged strongly from recession in the third quarter -- ahead of official gross domestic product data on the 16-member currency area due on Friday.

Germany itself pulled out of its worst recession since World War Two in the second quarter and data on Monday showed industrial output surged way above forecasts in September, boosted by a jump in demand for capital goods.

Economists surveyed in a Reuters poll expect it to accelerate to 0.8 percent growth in the third quarter from 0.3 percent in a flash estimate due out on Friday.

"The correction on equities markets has made analysts more cautious. The economic picture is not changing, as we can see when we look at new orders and foreign trade, which have recently significantly gained," said Simon Junker from Commerzbank.

"The recovery is clearly ongoing, and it will continue in the fourth quarter as well. If anything, growth will slow, but we do not expect a relapse." (Reporting by Andreas Framke, writing by Brian Rohan; editing by Patrick Graham)