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Confidence among institutional investors dipped in March with investor morale lower in North America and Europe but showing improvement in Asia.

The U.S. financial services firm said on Tuesday its State Street Investor Confidence Index fell slightly by 2.7 percentage points to 70 from a revised five-month high of 72.7 in February, led by a 4.8-point retreat in the North American index to 59.4.

State Street, which compiles the index by analyzing the buying and selling patterns of institutional investors, said the easing in U.S. investor sentiment was not surprising as it came after a rebound in confidence over the last quarter months from an all-time low of 30.6 in December.

Elsewhere, Europe had a 3.2-point decline in investor risk appetite but the Asian index rose by 2.5 points.

"There is an increasing sense among institutional investors that the rapid freefall of the real economy is approaching its end, both because much adjustment has occurred and because of the gathering power and breadth of the U paydayloans.S. Fed and Treasury response," said Harvard University Professor Ken Froot, a co-developer of the index.

"Institutions seem to appreciate this and are moving to a less defensive risk stance."

State Street said confidence among European institutional investors was still languishing at new lows, reflecting the relatively slower pace of policy response in the region.

The firm said the index would include indicators on level of institutional investor risk appetite from May 26. The index will be rebased so a reading of above 100 will indicate increasing exposure to risky assets and a sub-100 reading will imply a reduction of risky-asset exposure. 

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