Global institutional investor confidence rebounded in October on the back of increased North American and European confidence, according to State Street Global Markets.
Overall global investor confidence rose to 96.7 on the State Street Investor Confidence Index, which is based on buying and selling patterns of institutional investors, despite a slight decrease in Asian confidence.
This follows a small increase the previous month from 88.1 to 90, which came after a sharp 13 point drop in August – meaning overall confidence is still below the July figure of 102.5.
Despite a six point increase, North American confidence of 91.7 is still well below European (99.3) and Asian (98.7) investor confidence.
“While this month has seen an ebb and flow of risk appetite on headline news, the general trend has been upwards,” said index co-developer Kenneth Froot of Harvard University.
“To some extent, the constructive elements that institutional investors were focusing on in September – including solid corporate balance sheets and the prospects for a resolution of the European debt crisis – have caught the wider imagination this month. It remains to be seen whether the outcome of European negotiations will convince investors that a line has been drawn under the sovereign credit issue,” Froot said.
Index co-developer Paul O’Connell of State Street Associates said the concerted selling of emerging markets equities that characterised the August and early September periods has abated, and flows to riskier assets generally are much closer to neutral and cautiously positive in places.
