Institutional investors around the globe are feeling less confident according to the results of the State Street Investor Confidence Index for January 2007.

Global Investor Confidence decreased by three points to 85.0 from December’s revised reading of 88.0. Looking regionally, the confidence of North American institutional investors fell slightly from 98.2 to 96.1. The confidence of European investors decreased from 97.0 to 92.0, while the confidence of Asian investors fell from 90.1 to 86.8.

Developed through State Street Global Markets’ research partnership, State Street Associates, by Harvard University professor Ken Froot and State Street Associates Director Paul O’Connell, the index measures investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors.

“Globally, investor confidence has settled into a somewhat narrower range, comfortably above the levels seen at the start of 2006, but below the levels of 2004 and 2005,” said Froot. “Giving investors pause this month is a perception that growth will ease in 2007, particularly in the G3 countries, as the effects of the U.S. housing slowdown, Japanese monetary tightening and European fiscal restraint are felt.”

“This month, all three regional indices declined, the first time since December 2005 that this has occurred,” added O’Connell. “The confidence of both European and Asian institutional investors had reached all-time highs toward the end of 2006, so some pullback there is perhaps not surprising.”