Investors are less confident this month than they were in September.
The State Street global Investor Confidence Index (ICI) fell to 95.7, down 5.6 points from last month’s revised reading of 101.3 and 104.9 in August. A reading of 100 is neutral.
The decline was driven by sentiment in North America, which fell substantially by 17.8 points, pushing the North American ICI well into pessimistic territory at 86.5.
By contrast, confidence improved substantially among European institutional investors, reflected in a 10.2 point increase in the European ICI to 111.9.
“With European confidence at its highest level since July 2007, investors hope that the worst of the eurozone crisis is past,” says Michael Metcalfe, head of cross strategy research at State Street Global Markets. “The U.S. crisis of confidence, in contrast, may just be the beginning, unless policy uncertainty is reduced.”
Asian investors stayed their course, and as a result the Asian ICI saw only a modest change, rising 0.9 points to finish at 96.2.
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.
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