Institutional investor sentiment surprisingly positive in August

Staff Writer

Financial Newswire

2 September 2022

Despite the global headwinds of rising inflation and energy security, institutional investors remained remarkably confident in August, according to the latest State Street Global Markets Investor Confidence Index (ICI).

The index rose by 5.1 points in August to 107.3 with the increase being led by European investors and those in North America.

Asian investors were more cautious, with the Asian index falling 0.9 points to 92.4.

Commenting on the index outcome for August, State Street Associates head of Investor Behaviour Research, Rajeev Bhargava said the rise had been fuelled by an uptick in sentiment across the US and in particular European investors.

“Despite the many potential headwinds, including rising inflation concerns and energy security facing the European economy, interestingly, European investors have moved from a risk averse posture to a more neutral posture over the past month as markets rallied through much of August,” Bhargava said.

He said that even after the sell-off experienced over the past week, net flows by European investors had been from developed to emerging market stocks, which had driven up the confidence score.

“However, it is going to be important to monitor whether the enthusiasm persists given recent heightened volatility in equity markets on the back of increasingly hawks Federal Reserve speak,” he said.