First confidence decline in five months

The State Street Global Investor Confidence index decreased in October.

The global index was down 4.6 points to 104.3 led by a 14.4 point drop in European investor confidence and a 5.1 point drop in North America.

However, Asia reported increased investor confidence by 4.1 points to 104.5.

Rajeev Bhargava, head of investor behaviour research at State Street Associates, said: “The move was largely driven by weaker sentiment in Europe and US, with the former falling just over 14 points, likely driven by escalating concerns that the European Central Bank may be well behind in the tightening cycle and therefore bring hikes forward.

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“In addition, growing unease around UK fiscal outlook contributed to the volatility across European markets and in turn to the decline in confidence locally.”

The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’ research and advisory services business, in partnership with FDO Partners.

It measured investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors.

A reading of 100 would be neutral; it would be the level at which investors were neither increasing nor decreasing their long-term allocations to risky assets.