Investor sentiment across the globe is in closer alignment than it has been "for some time", according to State Street Global Markets.
The investment research arm of State Street Corporation says global investor confidence has risen by 3.6 points to 82.6 from a June high of 79.
According to State Street, Asian investors were the key drivers, pointing out their risk appetite increased by 8.5 points from 74.4 to 82.9.
The confidence of North American investors decreased by 6.9 points to 84.7 while European investors’ confidence fell by a negligible 0.9 points to 80.5.
“Globally, confidence improved somewhat, though this masks some regional variation,” says Harvard University professor Ken Froot.
“Despite the market turmoil of the recent weeks, particularly in the financial sector, institutional investors perceive some value at current price levels, and their willingness to take risk to capture that value continues to improve from its December lows.”
State Street Associates director Paul O’Connell adds: “After witnessing some significant regional disparities over the last year, this month we saw convergence across regions.
“North American investors were the first to turn pessimistic during the current cycle, and their risk appetite fell steeply in the fourth quarter of 2007.
“It wasn’t until the second quarter of 2008 that European and Asian investors turned pessimistic, a period when North American confidence began to recover.
“With this month’s slight decline in North America coupled with a rebound in confidence in both Europe and Asia, investors are more in alignment globally than they have been for some time.”
The State Street Investor Confidence Index is based on financial theory which assigns meaning to the willingness of investors to allocate their portfolios to equities. The more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence.
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