There has been a decline in investor confidence this month, according to a monthly measure issued by the US banking and financial services group State Street.

Investors became less confident about markets during November, with sentiment taking a particular hit in North America, while there was a rise in Europe, according to a monthly barometer of sentiment from State Street.

The State Street Investor Confidence Index fell to 106.8, down 7.2 points from October’s revised reading of 114. The decline in sentiment was driven by a decrease in the North American ICI from 124.8 to 112.9 along with the Asian ICI falling 9.3 points to 100.7. By contrast, the European ICI rose by 6.3 points to 96.5.

The index was developed by Kenneth Froot and Paul O’Connell at State Street Associates, State Street Global Exchange’s research and advisory services business. It measures investor confidence or risk appetite quantitatively by analyzing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.

“In November, the spotlight was once again on the Fed as investors adjusted to an increased probability of a December rate hike,” Froot said. “The North American sentiment resonated globally, signaling investors’ lack of readiness for US policy normalization, even if the pace is expected to be gradual,” he said.

“European sentiment has seen some improvement in response to the prospects of further ECB stimulus,” added Jessica Donohue, executive vice president and chief innovation officer, State Street Global Exchange.

“Divergence in monetary policy, however, was not enough to bring European sentiment above the risk-averse threshold. Moreover, Asian optimism has seen a sharp turnaround as a stronger dollar and continued commodity price declines weigh heavily on the region,” Donohue added.