State Street Global Markets (SSGM) Global Investor Confidence Index (ICI) fell 8.9 points to 91.9 in February, driven by large drops in European and Asian ICIs which decreased by 16.6 points to 78.1 and by 17.5 points to 98.2, respectively.
At the same time, the North American ICT also slightly declined by 2.8 points to 93.3.
According to Rajeev Bhargava, head of investor behaviour research, State Street Associates, the slower than expected vaccine rollout combined with the added complexity of new, potentially more infectious variants elevated growth fears, particularly in Europe where official growth forecasts were recently lowered.
“And while Asia continues to experience a rebound in activity on the back of strong exports, concerns over tightening credit conditions out of China may have dampened enthusiasm for the region, evident by the much weaker sentiment expressed by institutions this month,” he said.
The ICI measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors. A reading of 100 is neutral and indicating the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.
