Global investor confidence has seen its largest spike in 18 months, according to the latest State Street Global Investor Confidence Index (ICI).
The global index increased to 107.7, up from 11.4 points from July’s reading of 96.3.
This was led by a 12.9 point rise in the North American ICI to 103.8 and smaller rises in Europe and Asia. This meant all three regions covered registered rises during August.
The rise in North America was the strongest reading in a year, far greater than the 1.3 point uptick seen in the previous month.
The European ICI, which had fallen by 5.4 points in the previous month after deteriorating macro-economic data, rose 4.3 points to 103.7 and Asian ICI rose 4.8 points to 102.2, compared to a small rise of 0.7 points in July.
This month is the eighth consecutive month of positive growth in the index.
Marvin Loh, senior global macro strategist at State Street Global Markets, said: “Investor confidence saw its biggest jump in 18 months, with the global ICI now solidly in risk-seeking territory, as risk appetite improved in every region this month.
“The improvement was led by North America, which recorded its strongest reading in a year on the heels of falling recessionary concerns. A pair of better than expected CPI prints have also supported the view that a soft landing was possible.”
The Investor Confidence Index was developed at State Street Associates, State Street Global Markets research and advisory services business.
It measures 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.