European investors showed the highest level of confidence in August – way ahead of investors in the US and Asia despite apparent signs of a second wave of Covid-19 cases.
State Street Global Markets Global Investor Confidence Index (ICI) shows that European investors registered a reading of 122.6 points – which, being above 100, means they are buying risk assets more than selling them.
US and Asian investors were at 77.6 points and 89.9 points, respectively, suggesting there is more selling than buying.
However, confidence moved upwards between July and August in all regions, but none more so than in Europe where the European sub-index of investor confidence increased by 4.8 points (1 point US; 3.3 points Asia).
Yet at the global level risk appetite remained largely unchanged at 86.1 points in August. Rajeev Bhargava, head of investor behaviour research at State Street Associates, said investors continued to closely monitor the number of new Covid-19 cases and their impact on global growth.
“While US equity markets hit new highs, institutional investors seem more guarded, expressing a larger degree of restraint in August as the US ICI inched up only slightly to 77.6.
“Interestingly, Europe experienced a more pronounced uptick in sentiment despite weaker economic data and the onset of what appears to be the start of a second wave of Covid-19 in certain parts. A more constructive fiscal policy regionally is likely driving this response.”
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