State Street Global Exchange has announced that the Global Investor Confidence Index decreased to 94.3 points in August, down 7.4 points from July’s revised reading of 101.7.
However, the European Investor Confidence Index (ICI) went up by 8.1 points to 99.5, while the Asian and North American ICI decreased to 102.6 (0.9 points) and to 92.5 (from 103.1), respectively.
Kenneth Froot from State Street Associates, State Street Global Exchange’s research and advisory services business, who developed the ICI together with Paul O’Connell, said that global institutional investors started to display risk-averse behaviour due to “elevated trade uncertainty and geopolitical turmoil”.
“This sentiment was also seen across global equity markets as defensive sectors outperformed. The decline in confidence was particularly apparent for North American investors, with the North American ICI recording its lowest reading of the year,” he said.
According to State Street, an index reading of 100 is considered neutral and it’s the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.
Also, the index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors, the firm said.