Despite the significant improvement in European investor confidence, sentiment in both North America and Asia saw a decline.

Risk appetite in North America dropped 5.1 points to 103 while the investor confidence index for Asia declined 4.5 points to 97.1.

An index reading of 100 indicates a neutral position, according to State Street, and is the point at which investors are neither increasing nor decreasing their long term allocations to risk assets.

State Street Associates director Paul O’Connell said the most striking element of this month’s result is the fact the European index has risen to a record high of 140.

“Despite the visible evidence of relatively poor growth performance across Europe, investors are expressing demand for equity as opposed to fixed income investments in the region,” said Mr O’Connell.

“This may partly be driven by the relatively favourable valuations currently reflected on European bourses.”

State Street Global Exchange chief innovation officer and head of research and advisory services Jessica Donohue said given the strong patterns in recent US data releases, “the reduction in North American confidence may reflect the balancing act that the US Federal Reserve is engaged in with respect to monetary policy”.

“Investors are weighing the potential impact of interest rate increases across various sectors in the economy, and this is giving rise to some caution,” said Ms Donohue.