The global investor confidence index dropped 1 point to 97.1 in November, dampened by a significant loss of confidence in Europe as well as Asia, according to State Street.
According to the latest monthly reading of the State Street Global Investor Confidence Index, the “minor decline” in investor sentiment across the globe was attributed chiefly to a 12 point fall in the European investor confidence index (ICI) to 81.0.
Global investor sentiment lowered despite the slight increases in the North American ICI, which rose 3.7 points to 102.6, and the Asian ICI, which rose by 1 point, reaching 97.5.
The global ICI has fallen steadily since its peak in July this year of 108.9, representing an overall drop of 11.8 points since then.
Commenting on the results, State Street Associates managing director and head of investor behaviour research Rajeev Bhargava said there were political factors were at play in Europe.
“While tax reform prospects likely helped boost investor confidence in the US, rising political uncertainty and worries over tighter monetary policy conditions likely drove down sentiment in Europe,” Mr Bhargava said in a statement.
“It will be interesting to follow the path of investor confidence in the wake of failed coalition talks in Germany,” he added.
State Street Associates founding partner and ICI co-developer Kenneth Froot said global risk appetite “remain[ed] broadly subdued”.
“While the decline in sentiment was more acute in Europe, Asian sentiment has also taken a hit, as rising concerns about Chinese debt outweighed the potential benefits of cash injections by the People’s Bank of China,” Mr Froot said.
The ICI tracks risk appetite by analysing institutional investors' buying and selling patterns, with a reading of 100 signifying no change to investors’ “long-term allocations to risky assets”.
November has seen the largest rise in investor confidence since June, according to State Street Global Markets, with the leap led by a chang...