A gauge of investor mood that uses actual trades rather than opinion surveys found more optimism in September.

A barometer of investor sentiment around the world showed that the mood brightened in September, boosted by greater optimism in Asia.

According to State Street, its Investor Confidence Index rose to 95.5, up 5.8 points from the revised reading of 89.7 in the previous month. . The improvement in sentiment was driven by an increase in the Asian ICI from 105.9 to 118.6, along with the North American ICI rising from 89.6 to 92.3. By contrast, the European ICI decreased from 86.8 to 84.9, the report from the firm said yesterday.

“Globally, institutional investor confidence remains weak in September, in line with a subdued economic outlook and persistent low inflation. Regionally, inaction by the European Central Bank has prompted stock market volatility and has dented European sentiment even further. Meanwhile, investors are more optimistic on Asia, likely encouraged by continued policy support in China," Jessica Donohue, executive vice president and chief innovation officer, State Street Global Exchange, said.

Kenneth Froot, co-developer of the ICI at State Street Associates, said: “North American institutional investors remain risk averse at the moment despite the more optimistic outlook for the economy and the Fed’s assessment of the near-term risks to be ‘roughly balanced’."

The index measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.