The global Investor Confidence Index (ICI) declined in September, largely due to cautiousness in North America.
According to State Street Global Exchange, the global ICI fell to 101.4 in September, down 3.5 points from August’s revised reading of 104.9. A reading of 100 is neutral, representing the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.
The decline in confidence was driven by sentiment in North America, where the index fell 7.6 points to 104.5 from August’s revised reading of 112.1. The September reading was taken before the U.S. Federal Reserve’s recent announcement that it will not be pulling the plug on quantitative easing yet since the American economy still isn’t robust enough.
In contrast, European confidence rose by 4.7 points to 101.7, and Asian confidence rose by 2.1 points to 95.3, compared with their revised August readings.
“There is still a sizable but narrowing gap between North American and Asian investors,” says Jessica Donohue, senior managing director and head of research and advisory services at State Street Global Exchange. “The fear of the Fed’s liquidity withdrawal has had a disproportionally larger impact in Asia where investors are also worrying about slower growth in China. With the worst of those fears yet to materialize, it will be interesting to see if this sentiment gap diminishes further next month.”
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