The 2.1 point decrease in July was attributable to a 4.9 point drop in the European Investor Confidence Index (ICI) and a 0.3 point drop in the North American ICI, a statement from State Street said.
Commenting on the results, Kenneth Froot, State Street ICI co-developer, said, “After a boost in risk appetite in July, global investors appear to be ‘on hold’ in August.”
The month of July saw a 7.9 point uptick in investor sentiment from 101 points to 108.9, as reported by InvestorDaily.
State Street Global Markets head of global macro strategy and senior managing director Michael Metcalfe said everything seemed to have “gone right in the eurozone this year”.
“Growth and earnings have beaten expectations and political risk has not being realised,” he said.
“Nevertheless, the more cautious approach of European investors this month shows that the potential headwinds of a stronger euro and eventual tapering of central bank asset purchases can no longer be ignored.”
The index indicates changes in investor risk appetites with a reading of 100 being neutral, whereby “investors are neither increasing or decreasing their long-term allocations to risky assets”, according to the statement.
