By Jeremy Gaunt, European Investment Correspondent
LONDON, April 21 (Reuters) - Investors are becoming increasingly confident that equity markets and the world economy are on the mend following a near 30 percent stock rally and a series of better-than-expected economic reports.
Even as global stocks were taking a hit on Tuesday amid renewed worries about the state of U.S. banks, two sentiment surveys showed investors looking ahead to better times.
State Street's monthly global investor confidence index shot up to a nine month high in April, with the U.S. financial services firm finding improved sentiment across the board in North America, Europe and Asia.
Meanwhile, Germany's ZEW survey of analysts and investors not only rose more than expected it entered positive territory for the first time since before the credit crisis erupted.
"Investors are gradually seeing light at the end of the tunnel," said economist Andreas Rees from Unicredit.
The two sentiment indicators fit into a pattern seen in other surveys. Reuters asset allocation polls, for example, have shown a steady increase in the appetite for equities since the beginning of the year.
The latest surveys follow a sharp rise on world equity markets. MSCI's all-country world index began rallying from a low on March 9 and rose nearly 30 percent over six weeks of gains.
There has also been as stream of economic news that at the very least has suggested a levelling off of the global downturn.
The past two days, however, have seen losses and raised the question among some investors as to whether the rally is simply stalling or will reverse.
SENTIMENT UP
State Street said its global investor confidence index rose by 9.4 points to 79.6, its highest since July, from the upwardly revised March reading of 70.2.
The index is now 65 percent up on an all-time low in December of 48.2, but well off the record high of 111 set in February 2001.
"Institutional investors have participated with some enthusiasm in the recent market recovery," said Ken Froot, Harvard University professor and a co-developer of the index.
The data is extrapolated from movements in around $12 trillion of assets State Street holds as custodian for institutional investors.
The Mannheim-based ZEW economic think tank said its monthly poll of economic sentiment rose to 13.0 from -3.5 in March, showing its first positive reading since July 2007.
April's rise took the headline index to its highest level since June 2007, shooting well past the 1.5 consensus forecast.
The ZEW report comes days before two other German indicators are expected to show slight improvements -- both a purchasing managers' survey due on Thursday and Friday's business climate index from the Ifo institute are seen edging up in April. (Additional reporting by Natsuko Waki and Krista Hughes; Editing by Victoria Main)
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