Global investor confidence improves in December, says State Street

Global investor confidence nudged up a point in December from November’s revised reading of 107.3, according to the State Steet Investor Confidence Index (ICI), which gauges institutional investors' desire for risk by analysing their buying and selling patterns.

The improvement in sentiment was driven by a rise in the European ICI to 103.7 from 96.2 and the Asian ICI, which increased 4.6 points to 105.1.

However, the North American ICI fell 5.9 points to 106.6.

A reading of 100 is neutral and is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.

“US investors have been showing an appetite for risk for much of 2015, but have been increasingly risk averse into year-end as uncertainty about global growth, weak commodity prices and the beginning of the Fed tightening cycle have eroded confidence to take risk,” said Ken Froot, founding partner of State Street Associaitons.

“The knee jerk reaction from European equity and bond markets was to sell off together when the European Central Bank eased but failed to increase its asset purchases program in early December,” added Michael Metcalfe, senior managing director and head of Global Macro Strategy at State Street Global Markets.

“It appears European long-term investors were more forgiving as their allocation to risky assets went up over the course of the month.”