Risk appetite among investors in July was at its highest level since mid-2004, according to a survey by State Street Global Markets.
The State Street Investor Confidence Index®, which measures investor confidence by analysing the buying and selling patterns of institutional investors, rose by 3.6 points to 119.4 from a revised June level of 115.8.
It shows investor confidence in Europe and the US rose strongly, while Asian investors were also more positive about the stock market.
The mood in July is markedly different from last October, when the index reached its lowest-ever-recorded level of 82.1.
"The index results strongly reflect increasing investor strategies designed with a view that the global recession will wane more rapidly than many had feared," says Harvard University professor Ken Froot, who helped to compile the index.
"Investors are now adding risk to their portfolios at an impressive rate, faster than we have seen in several years," he adds.
He notes the marked contrast with consumer confidence, which he says remains more focused on lagging unemployment.
State Street Associates director Paul O'Connell says: "European confidence is much stronger this month, partly because of the concerns around the US seeming to abate, but also because the contagion that might have brought down their own financial institutions seems to be dissipating fast.
"Asia has seen less variation in expected growth rates than the West and confidence there continues to strengthen, although there was never such an Asian wholesale fear of risk."
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