Lukewarm global investor confidence has been further cooled by pessimistic Asian investors, according to the State Street Investor Confidence Index, created by State Street Global Markets, the investment research and trading arm of New York-based State Street Corporation.

While North American investor risk appetite investors crept up 1.1 points from October, to 102.2, and European investor confidence rose 3.7 points to 105.5, Asian investor confidence fell 4.1 points from 95.3 to 91.2.

However, since a reading of 100 indicates a neutral position - allocating neither towards nor away from risky assets - the drop in Asian confidence has outpaced the slow recovery of optimism in the West.

Even though investors do not have a generally negative outlook, says State Street, the US account deficit, Asian surplus, decline of manufacturing employment and approaching end to government stimulus all conspire towards consolidation.

“Across all regions, institutional investors are largely treading water; neither increasing nor reducing their aggregate holdings of risky assets…Overall, investors are displaying some caution about the current level of equity valuations, and a desire to see more evidence of real economic activity and aggregate demand, particularly in the US, before adding to equity exposures,” said professor Ken Froot of Harvard University, who helps put together the research.

According to Mr Foot, regional figures hide national differences and even region-specific views. For example, institutional investors have cut their holdings in Australia, while continuing to add to their emerging markets holdings.