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North Americans drive investor confidence down
An eight-point increase in investor confidence over June and July has taken a substantial dip in August as July's revised reading of 94.3 fell to 90.9, according to State Street's Investor Confidence Index (ICI).
The global ICI increased by 7 points in June to its highest level in 2012, driven by a 5.7 point increase in North American investor confidence.
But a sharp decline in risk appetite in August saw the North American ICI slip back 8.7 points to 84.4 in August, on top of a 0.6 point decline in July.
The European ICI experienced the same slight downtick as last month, dropping 0.5 points to 101.2 while the Asian ICI had its fourth month of consecutive improvement, climbing 2.9 points to 93.5.
Despite this, European investor confidence remained above neutral while Asian investors remained the most bearish, unchanged from July's reading.
"While confidence among European and Asian investors has broadly stabilised, this month's reading on North American risk appetite signals a clear set-back," Harvard University Professor Kenneth Froot said.
Positive signs for European equities in July translated into some concrete European (excluding UK) equity buying in August due to policy-makers' concerted efforts to limit any 'tail-risk' of a possible Euro-currency meltdown, according to Froot.
However the composition of flows over August was slightly less defensive than for the same time last year, he said. Gains in the materials and financial sectors had come at the expense of utilities and consumer staples, according to Froot.
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