European investor confidence drops despite overall rise

Global investor confidence rose seven points to 120.8 despite a drop in the European investor confidence index, according to State Street Investor Confidence Index (ICI) for May 2015.  

North American investors lead with a rise of eight points to 129.4, followed by Asia's 7.4 point rise to 98.6. However, the European ICI fell 5.5 points to 103.8.

"In Europe, a rising Euro, increased sovereign yields, and the continued Greek funding drama helped contribute to the decline," State Street Global Exchange executive vice president and chief innovative officer, Jessica Donohue said.

"However, the front-loading of sovereign bond purchases by the ECB [European Central Bank] before the summer months may help reverse recent trends."

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Donohue said the lower dollar, stabilising energy prices, and reduced expectations of an imminent rate hike provided tail winds to the North American sentiment.

"Investors must now wait and see whether a rebound in second quarter growth will lead to more hawkish statements form the Federal Reserve," she said.

"In Asia, policy manoeuvres in China helped boost investor confidence."

The index reads 100 as the neutral level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. It is only based on actual trades, as opposed to opinions.