The State Street Investor Confidence Index rose 6.8 points in May, to 104.1, its highest reading since December.

The increase was led by North American investors, whose confidence rose 7.7 points, to 106.3, from April. European investor confidence rose 5.2 points, to 79.0. However, Asian investor confidence fell 2.7 points, to 96.7.

A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their allocations to risky assets.

"In the period since the April Investor Confidence announcement, more evidence has accumulated that macroeconomic conditions have softened somewhat, which has been reflected in equity and commodity prices," said Harvard University Professor Kenneth Frott, who developed the index with Paul O'Connell of State Street Associates.

He added, "As we have seen on a number of occasions in the past, institutional investors sometimes view these periods as opportunities to accumulate additional equity exposure, and this month is no exception."

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