Mixed signals about the global economy have triggered an unexpected fall in investor confidence, a report shows today.

The Investment and Financial Services Association CoreData Investor Sentiment index fell to 2.9 points in the first quarter of 2010 from a reading of 7.4 points the final quarter of 2009. The index had risen three of the four quarters in 2009.

“The index shows an unexpected decline in investor sentiment, given the markets have continued on an upward trajectory since the end of 2009,” said analyst Kristen Paech at market intelligence and consultancy firm CoreData.

Australian stocks have rebounded 55 per cent since their March 2009 lows, while the economy has effectively skirted the financial crisis, posting 0.9 per cent growth in the fourth quarter. The benchmark ASX 200 share index has risen for each of the past six weeks, placing it marginally back into positive territory for 2010, prior to today's trading.

Prospects for the local economy may hinge on how fast house prices rise and whether the pace prompts further interest rate rises by the Reserve Bank. Home prices surged an average of 13.6 per cent in state capitals in 2009.