GLOBAL - Investor confidence has dropped 3.3 points to 100.9 in January from 104.2, State Street research shows.
The State Street Investor Confidence Index found confidence fell across all regions, with the risk appetite of North American institutional investors dipping to 99.5 from December's level of 103.1 and in Europe by 3.9 points to 93.5 from 97.4. Asian investors also lacked confidence, dropping 5.4 points from 102.9 to 97.5.
Harvard University professor Kenneth Froot said: "Institutional investors reverted to a more cautious stance this month, balancing improved prospects for global growth against what has been a relatively rapid run-up in prices. With world equity prices up 6.9% over three months and 20% over six months, valuations have moved up a reasonable amount, prompting some in the institutional community to adopt a ‘wait-and-see' stance. It remains to be seen whether improved macroeconomic data from the US and policy actions with respect to peripheral European debt will prompt an early reassessment of this stance."
State Street partner Paul O'Connell added: "This month's indicator window spanned the end-of-year holiday period, a time when investors are often more reticent to deploy new risk. At the same time, the data we do have for 2011 shows no new net commitments to equity markets. The most evident pattern is a rotation out of the US and into Asia and Europe, reflecting perceptions of relative value across these markets."
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