Global investor confidence fell from February’s reading of 91.4 to 88.0 this month, driven primarily by a drop in North American sentiment, according to State Street Global Market’s Investor Confidence Index.

Confidence among North American institutions decreased from February’s level of 99.7 to settle at 95.5, while European investor confidence slipped 0.4 points to 91.7. By contrast, risk appetite among Asian institutional investors increased slightly by 1.8 points to end the month at 87.3.

“Investors have had to contend with three setbacks emanating from Europe over the past month: the Italian election result on February 25, President Draghi’s comments on March 7, and the announcement of Cypriot bailout conditions on March 15,” said Professor Kenneth Froot.

Investors continued to accumulate equities up until March 7, Froot noted, but thereafter adopted a more cautious tone. “It remains to be seen whether this will mark a consolidation of positioning in advance of a further round of risk-taking, or a more meaningful pause in risk appetite,” he said.

Professor Paul O’Connell added that investor confidence is “well-illustrated” by the data on emerging markets equity allocations, saying: “After a virtually unbroken stream of ‘buying’ days this year, institutional investors have held their allocations to emerging markets constant in the most recent weeks.”

He added: “European and Asian investors remain somewhat less optimistic than their North American counterparts, and across all groups, the heavy selling of fixed income securities observed in February has tapered towards zero.”