State Street Global Markets’ latest Investor Confidence Index (ICI) – which measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors – reported a 4.0-point drop from 109.9 in August to 105.9.
The European ICI attributed most to the dip, which fell by 9.2 points to 95.6, while the North American ICI also fell by 4.4 points to 106.1.
Meanwhile, the Asian ICI fell minimally, dropping 0.8 points to 97.7.
State Street Global Markets’ senior macro strategist, Marvin Loh, said that despite the hit, the global ICI has remained near its highest level in three years.
“Resurgent infections from the Delta variant have resulted in lowered growth expectations globally, although the economic backdrop continues to look attractive for above-trend growth in 2022,” Mr Loh said.
Additionally, numerous central banks, including the Fed, have indicated that they will slow asset purchases in the coming months, with some expected to wind down their QE operations by mid-2022, which may provide an ongoing headwind until the timeline for rate hikes becomes clearer.”
State Street’s report comes after data found that global activity in August also dipped due to rising COVID cases throughout Europe.
Last month, the European market experienced a 25 per cent decline in deal volume compared with July as infections rose, while other regions saw spikes.
GlobalData lead analyst Aurojyoti Bose said it the surge in new cases has left investors concerned, while the World Health Organization (WHO) anticipate around 236,000 COVID-related deaths in the region by December.
