Global investor confidence declined overall in September but some regions saw confidence rise – including Europe.
State Street’s Global Investor Confidence Index (ICI) saw an overall decline of 2.4 points, to 104.4 (100 is the break-even point, meaning sentiment is still positive). This was driven by a drop in the North American index.
However, the European ICI registered a 4.7 points rise to 93.7.
The index measures investor confidence or risk appetite quantitatively by analysing the buying and selling patterns of institutional investors. The greater the percentage allocation to equities, the higher risk appetite or confidence.
Kenneth Froot, professor emeritus of business administration at Harvard, said: “The regional breakdown of our Investor Confidence Index this month reveals rather diverging paths. Confidence has strengthened in Europe and Asia on the back of optimistic economic conditions. However, it has weakened in North America with renewed geopolitical concerns and the [Federal Reserve’s] pivotal decision to gradually trim its $4.5 trillion portfolio."
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