The State Street Global Investor Confidence Index rose 5.4 points in January to 86.8 from 81.4 a month earlier, State Street Global Markets announced Tuesday. North America led the rise in global confidence, jumping 7.8 points to 86.3. In Asia, confidence also increased, hitting 91.0, up 3.9 points a month earlier.  Europe, however, saw a drop in confidence, falling from 94.1 to 89.6. 

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.

“2013 has opened with something of a turnaround in demand for global equities by institutional investors,” Kenneth Froot, a Harvard University professor and co-developer of the index, said in a statement. “This comes on the heels of a two-and-a-half year-period of persistent ‘de-risking’ by these institutions.” 

Paul O’Connell of State Street Associates, the other co-developer of the index, noted that the disparities in confidence that prevailed across the regions for much of 2011 and 2012 have dissipated in recent months. “There is now more global consensus on the appropriate stance to take towards risky assets,” he said.

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