Europe confidence shaken as North America and Asia post mild gains
Global investor optimism dropped for a fourth straight month in November as shaken confidence in Europe offset slight improvements in North America and Asia.
The Global Investor Confidence Index (ICI) fell 4.2 points to 91.3 from October’s revised reading of 95.5 points, according to State Street Global Exchange. November marks the second straight month of confidence in negative territory, or below the 100-point threshold that indicates a degree of investor pessimism. The index has fallen 13.6 points since July, with drops every month.
The European ICI was the only regional index to remain in positive territory even as it plunged 9.8 points to 101.5 from a revised reading of 111.3 in October. The North American ICI rose 3.2 to 89.4 points from a revised October reading of 86.2, while the Asian index rose 3.4 to 98.9 from a revised 95.5.
The regional indices reversed the movement of October, when Asia and North America fell against Europe’s gain. An ICI reading above 100 indicates optimism and an increased appetite for risk, while a reading below 100 indicates investors are more pessimistic and decreasing their long-term holdings of any assets perceived as risky.
European sentiment took a hit as investors reconsidered the outlook for the UK economy. Sentiment has been boosted in the US by the nomination of Janet Yellen as the next Federal Reserve chairman, leading investors to believe the central bank will delay any cuts to its program of quantitative easing, which has boosted stocks in recent years.
‘Our readings this month are in direct contrast to those in October,’ says Jessica Donohue, head of research and advisory at State Street Global Exchange, in a press release. ‘European confidence, which clocked in at its highest level since July 2007 last month, has retrenched to near neutral territory, driven primarily by weaker sentiment for the UK.’
