Investors in North America, Europe and Asia lost confidence in April, according to State Street's monthly gauge of investor sentiment.

Global investor sentiment has fallen this month despite the European Central Bank’s surprise interest rate cut in March, according to State Street's Global Investor Confidence Index.

The Global ICI, which covers North America, Europe and Asia, dipped by 5.7 points to 109.1, driven by a decrease in the North American ICI from 123.7 to 115. The Asian ICI was down by 4.2 points at 107.8 while the European reading fell the least, from 95.8 to 95.3. 

Confidence waned as investors contemplated stretched valuations following the recent rebound in equities and commodities, said Kenneth Froot, who developed the index with Paul O’Connell at State Street Associates.

“Disappointing corporate guidance has been counterbalanced by increased easing expectations out of the European Central Bank and Bank of Japan. Absent further central bank action, investors will look to improving fundamentals to sustain a rally going forward,” said Froot. 

“The implication is that the aggressive easing by the European central bank in March was sufficient to stabilise but not sufficient enough to boost sentiment in the region,” said Michael Metcalfe, senior managing director and head of global macro strategy at State Street Global Markets. 

The ICI measures investor confidence or risk appetite by analysing actual buying and selling patterns of institutional investors. The latest findings relate to the period ended 26 April.