Global investor confidence rose in May, inching up 1.8 points to 94.8 from 93.0 the month before, according to the State Street Investor Confidence Index.

The rise in confidence was driven by Europe, which registered 93.3 on the index, up 5.6 points from April. Asia, too, was bullish, with confidence edging up to 86.0 from 85.2. Among North American investors, however, confidence fell, dropping 2.2 points to 102.5.

The monthly index measures investor confidence or risk appetite by analyzing actual buying and selling patterns of institutional investors, State Street Global Markets, the investment research and trading arm of State Street Corp., said in a statement. A reading greater than 100 means that institutional investors are increasing their allocations to risky assets, meaning they’re buying stocks.  A reading less than 100 indicates the opposite: investors are selling equity positions. A reading of 100 is neutral, meaning that institutional investors are neither increasing nor decreasing their allocations to risky assets.

“Institutional investors continued to augment their allocations to risky assets this month, albeit at a slower pace than we observed in either the first quarter, or the last weeks of April,” said Kenneth Froot, a Harvard University professor and co-developer of the index, said in a statement.

Paul O’Connell of State Street Associates, the other co-developer of the index, noted that the uptick in confidence in Europe is a welcome development as it represents a positive change of almost one standard deviation. “It remains the case that the European index is below the neutral level of 100, and it may take an improvement in European growth prospects to alter this. Looking at actual buying patterns, institutional investors continue to favor Europe ex UK, emerging markets and Japan, with less enthusiasm for non-Japan Asia,” he said.

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