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The ICI measures institutional investor trades to determine changes in risk appetite. A reading of 100 is 'neutral' and indicates that investors are neither increasing nor decreasing their long-term allocations to risky assets.
The Asian ICI saw a 4.6 per cent decrease to settle at 116.1 points, which State Street Global Exchange executive vice president Jessica Donohue said was driven in part by “exacerbated anti-globalisation jitters” following Donald Trump’s election victory.
“Moreover, confidence in Europe further declined to the mid-eighties, a relatively low level, as the UK’s exit from the European Union and Italian political risk remain sources of major concern,” she said of the 2.6 point decrease in the European ICI, which now sits at 86.5.
North America was the only region to see an increase in investor confidence, with the region’s ICI rising 0.1 point to 95.7 points.
ICI developer Kenneth Froot said the global decline in confidence suggested investors are reluctant to embrace market reactions to Mr Trump’s election win, and cautioned a number of upcoming events may also have an impact on confidence.
“It is yet to be seen whether the stress deriving from upcoming events, such as the OPEC meeting in November and the ECB and FOMC meetings in December, will have any additional impact to the risk sentiment before year-end,” he said.
The decline in confidence seen through November comes after two months of consecutive increases in confidence which saw the Asian ICI reach a record high last month.
[Related: Loss of AAA rating bad news for borrowers]