State Street Global Markets, the investment research and trading arm of State Street Corp. in Boston, released its institutional investor confidence index for June on Tuesday, showing a 4.7-point increase from the May level, to 91.
By region, the confidence of North American institutional investors rose 9 points, to 108, and Asian investors, 3.1 points, to 81.8. But European investors's confidence fell 6.7 points, to 87.2.
The index is based on financial theory that assigns precise meaning to changes in investor risk sentiment, or the willingness of investors to hold proportionally more or less of their portfolio in equities, the company said.
"When it comes to investor sentiment, things are so bad they are good," Ken Froot, a Harvard professor who helped develop the index, said in a press release. "Institutional investors do not fully share the rising concerns surrounding tighter central bank liquidity reflected by the market as a whole.
"There is no question that in the early spring the market underestimated the degree to which inflation pressure would continue to build," he said. "However, the fall in prices and the recognition that relatively minor additional increases are needed, has brought professional investors back as buyers."
