Investor confidence rose fractionally by 0.2 points to 104.5 in January from a revised December level of 104.3, according to the State Street Investor Confidence Index.

The mood was upbeat in North America, where confidence showed an increase of 4.4 points over December’s reading of 103.5 to settle at 107.9.

In Europe, by contrast, institutional investors were more wary, and their confidence fell 5.6 points to 98.9 from the December level of 104.5.

Amongst Asian institutional investors, confidence rose slightly to 98.1 from a level of 97.5 in December.

Developed through State Street Global Markets’ research partnership, State Street Associates, by Harvard University professor Ken Froot and State Street Associates’ Paul O’Connell, the index measures investor confidence on a quantitative basis by analysing the actual buying and selling patterns of institutional investors.

“Institutional investors had a number of competing claims on their attention this month,” says Froot. “Impressive growth numbers out of China for 2009 buttress anecdotal evidence that expansion continues apace there, lending a positive tone to a number of asset classes. At the same time, there is some evidence that while activity has picked up to a substantial degree in the developed markets, the recent pace of improvement may be difficult to sustain, all the more so against a backdrop of uncertainty around monetary policy and regulatory change more generally.”