Released by State Street Global Markets on Thursday, the global Investor Confidence Index (ICI) decreased to 90.4, down 14 points from October’s revised reading of 104.4. North America had the largest drop of 15 points to 88.7, followed by a 14.2-point drop in the Asian ICI to 91.0.
Bucking the trend, the European ICI rose 5.4 points to 91.8.
State Street Associates developed the ICI in partnership with FDO Partners. The company said the index “measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors”.
An index reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index is based on actual trades, as opposed to opinions in a survey-based measure of institutional investors.
“Investors’ risk appetite contracted by its largest margin of the year as the Global ICI fell 14.0 points to 90.4, indicating falling equity allocations and overall market confidence,” commented Marvin Loh, senior global macro strategist at State Street Global Markets.
“Growing recessionary concerns in North America contributed to the overall decline, with this regional measurement falling 15 points to 88.7, its lowest reading since the start of the pandemic.
“Asia recorded a comparably sizable 14.2-point decline to 91.0, as China’s continued adherence to its strict zero-COVID-19 policy obfuscated an expected regional rebound.
“Readings from Europe remained below 100, although they did marginally improve with a mild start to winter, easing some concerns over the continent’s energy crisis.”
This is the second straight month of falling investor confidence, though it is a much larger drop than the 4.6-point decline in October.
