The latest monthly update from State Street shows that July’s Investor Confidence Index (ICI) uptick was attributable to a 10-point increase in North America’s ICI, bringing the global ICI to 108.9 from 101 points in June.
State Street Associates’ managing director and head of investor behaviour research Rajeev Bhargava said improvements in economic growth across the globe “seem to have ignited institutional investors’ risk appetite”.
“Strong earnings, growth expectations and optimism grounded in the improving economic outlook have taken precedence over the rising anticipation of reduced central bank balance sheets and a more hawkish tone,” Mr Bhargava said.
Though North America ICI had improved in sentiment at 112.1 from 102.1, the European ICI dropped by 4.3 points to 94.2 and the Asian ICI this month was 96.0, falling by 1.3 points.
State Street ICI developer Kenneth Froot said the European ICI “remains in risk-off territory” in contrast to North America’s uptick in sentiment.
“With fading political headwinds and a strong tone to the eurozone corporate earnings data, the ECB’s dovishness came as a surprise. As a result, European market participants continued to express caution,” Mr Froot said.
“In addition, the buildup of corporate debt in China and concerns about the Trump administration’s global trade policies may have led to the decline in the Asian ICI.”
The ICI is an index developed by the SSGX’s research and advisory arm State Street Associates and measures investors’ risk appetites by analysing their buying and selling patterns.
The ICI is released by State Street on the last Tuesday of every month.
