Investor confidence rose slightly in March, according to the State Street Investor Confidence Index (ICI) which measures investor confidence and risk appetite by analyzing actual buying and selling patterns of institutional investors.
The index increased by 3.8 points to 81.4 from February’s revised reading of 77.6.
The increase was led by an 11-point rise in European investor confidence index (ICI) to 117.5, with a smaller 0.9-point increase in North American ICI to 73.9. Asian ICI, on the other hand, fell 6.3 points to 91.9.
“In the face of heightened stress in the US banking sector, institutional investors continued to take a defensive stance with the global ICI posting at 81.4 in March, well under the risk-neutral level of 100,” commented Rajeev Bhargava, head of Investor Behavior Research at State Street Associates.
“While the aggregate sentiment remained weak, it is important to report that investor confidence did not deteriorate further in March but actually firmed a touch, with our global measure gaining around 4 points.”
Bhargava noted that North American investor confidence remained steady through March albeit at weak levels, possibly supported by talks that the FDIC will extend insurance to all deposits, and in Europe investor optimism climbed sharply higher.
“With Asia being the only region that witnessed a decline in sentiment, the behavior of institutions in March demonstrated some level of resilience to the recent bout of market volatility,” Bhargava said.
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