The State Street Investor Confidence Index, which gauges the confidence of institutional investors as measured by their exposure to equities, rose eight points to 104.4 in December, up from 96.4 in November. A reading of 100 is neutral.

In North America, confidence rose 7.7 points to 103.1 from November’s level of 95.4. Likewise, in Asia, confidence increased by 7.4 points to 102.9, up from 95.5.

However, in Europe, investor confidence decreased 10.8 points to 99 from 109.8 in November.

“This month, the confidence of institutional investors has continued its late-year improvement,” said Harvard University Professor Kenneth Froote, who developed the index in conjunction with State Street Associates. “Clearly, the scenario for moderated world growth with recovery in the U.S. has increasingly gained traction. Confidence in both North America and Asia has now edged above the neutral level of 100, after a relative weak mid-2010.”

The scenario is different in Europe, which continues to face a credit crisis, added Paul O’Connell of State Street. “We went quickly from a regime of concern around the euro and the liquidity of some of the small countries’ debts to a regime where those concerns were ignored. And now we have come full circle. European investors are back again worrying that high sovereign indebtedness may prove destabilizing for the region.