Global investor confidence experienced an uptick for the first time in half a year in January, boosted by increases in investor confidence across all regions, says State Street Global Exchange.
Investors across the world have exhibited an “improved appetite for risk” after State Street’s investor confidence index (ICI) rose 6.4 points to 102.1 points in January from a revised reading of 95.7 the previous month, according to State Street Global Exchange.
The European, Asian and North American investor confidence indexes rose in the month of January by 16 points, 6.1 points and 1.7 points, respectively.
“Global equities have seen the best start of a new year in three decades,” said ICI co-developer Kenneth Froot.
“Stocks are hitting all-time highs, earnings forecasts are rising and positive earnings surprises have outweighed disappointments across global markets.
“Given this backdrop, it is not surprising that global institutional investor confidence is showing signs of optimism.”
State Street Associates managing director and head of investor behaviour research Rajeev Bhargava said the index was revealing a burgeoning sense of confidence occurring in Europe “after two years of subdued risk appetite”.
“Improving European economic growth, subsiding political uncertainties, and the European Central Bank’s accommodative policies are possibly feeding into stronger enthusiasm,” he said.
The ICI measures investors’ risk appetite by analysing the buying and selling patterns of institutional investors, with a higher reading denoting higher risk appetite and a ‘neutral’ reading of 100 signifying investors were neither increasing nor decreasing allocations to assets.