Global investor confidence dropped sharply in July amid dramatic volatility in Chinese stocks, lingering concerns over the Greek bailout and the outlook for the eurozone, according to a survey by State Street Global Exchange.
State Street’s Global Investor Confidence Index (ICI) fell 12.5 points to 114.6 from a revised 127.1 in June, State Street says in a press release. The North American ICI led the drop, falling 20.6 points to 122.6 while the European ICI declined 2.1 points to 100.4. The Asian ICI rose 2.6 points to 89.5 as Chinese authorities stepped in to buoy the country’s stock markets.
‘The rollercoaster ride across China’s equity markets and the absence of a definitive Greek bailout agreement has certainly weighed heavily on risk appetite, with our Global ICI slipping by 20.6 points, the largest monthly decline since 2009,’ says Jessica Donohue, executive vice president and chief innovation officer at State Street Global Exchange. ‘While the aggressive response of the Chinese authorities to calm investors’ nerves seems to have had a net positive effect on sentiment within the region in the month to July 22, the continued volatility in equity markets highlights how temporary such measures can be.’
The Shanghai Composite Index has fallen almost 30 percent since June 12 amid fears that stocks are overvalued. The government has stepped in with a series of measures, including forbidding investors with stakes of more than 5 percent from selling shares in their companies and sponsoring the purchase of billions of dollars’ worth of stocks.
Although Greece reached a tentative agreement in negotiations with its creditors, Prime Minister Alexis Tsipras suffered revolts from a large portion of his own party for giving in to European Union demands as the country started a new round of bailout talks.
